By Manuel Gutierrez, Consulting Economist to NKBA

 

At 6.66 percent, the rate is four-hundredths of a point lower than last week, but more than double the 3.05 percent from a year ago.

 

  • Rates have not been at these levels since 2009.
  •  The slight drop for this initial October read follows six consecutive weeks of gains, primarily due to more aggressive policies of the Federal Reserve Bank.
  •  The rate for 15-year loans has also more than doubled over the last year, from 2.3 percent in early October 2021 to the current 5.9 percent.
  •  The Fed Funds rate, which is essentially the rate one financial institution charges another for an overnight loan, has directionally moved with mortgage rates, from nearly 0 percent six months ago to the current 3.08 percent.
  •  Recent softening of demand for housing, in the form of declining sales of both existing and new homes, is relieving pressure on mortgage markets for now, but will likely reverse if the Fed continues to raise rates.