The U.S. treasury announced they’re going to issue less long-term debt than expected and the Fed held interest rates steady. Those two events brought rates down a bit–at least temporarily.
Mortgage rates came down slightly today, with the daily average 30-year rate dipping to 7.69%, its lowest level in about three weeks. Rates hit a high of 8.03% on October 19. Homebuyers who are waiting to lock in a mortgage rate may want to take the plunge today or tomorrow.
Two economic events are pushing mortgage rates down, at least temporarily:
Today’s treasury refunding announcement was a bigger deal than usual. The quarterly refunding statement, which outlines how the government is going to fund itself, is typically routine, but this month commentators paid attention because it could help bring interest rates down. The treasury announced smaller-than-expected increases in the 10-year and 30-year auction sizes, which means they’re going to issue less long-term debt than the market had anticipated, and more short-term debt. That’s after a refunding announcement from earlier this year surprised markets by saying it would make up for an unexpected tax shortfall by issuing more long-term than short-term debt. That earlier announcement was one of the factors pushing up long-term rates–and mortgage rates–over the last few months. Now, this reversal is bringing rates down a bit.
The Fed held interest rates steady at its November 1 meeting, as expected, leaving them at a 22-year high but not hiking them even further. The Fed signaled that rates will stay elevated into 2024 to continue combating inflation and cooling the economy, and left open the possibility of one more rate hike this year. The unsurprising announcement didn’t move the markets much, but it did play a small role in bond yields falling, which puts downward pressure on mortgage rates. Plus, it’s possible that some investors waited until after the Fed announcement to act on the treasury refunding news. Interest rates (and mortgage rates) would have fallen a bit based only on the treasury refunding news, and the Fed announcement likely pushed them down slightly more.
But things could change with Friday’s jobs report. Economic data comes out frequently, and most of it has the potential to move mortgage rates. The next noteworthy economic release is new jobs data this Friday. That’s why homebuyers who are waiting to lock in a mortgage rate may want to do so now: Even though rates are high, they’re lower than they were last week and potentially lower than they will be next week. Talk to your mortgage broker for more information; everyone’s personal circumstances are different.
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