Mortgage Rates Fall for a Fourth Straight Week to 7.11%

Update, November 13: The bond market didn't wait for this survey. The 10-year Treasury yield closed at 5.10% on November 12, up from 4.84% on November 5. That's right back where it was in mid-October, the week Freddie Mac's average peaked at 7.40%. Rate sheets are likely higher today than the 7.11% average below shows, so quote your borrowers today's rates before you call this a good week to buy.

Freddie Mac's average 30-year fixed rate was 7.11% on November 12, down for the fourth week in a row and the lowest in seven weeks. It's not a rally. It's a slow walk back down the hill October ran up. But if you have borrowers who hit pause when rates crossed 7.4%, this is a good week to call them.

What happened

Freddie Mac publishes its Primary Mortgage Market Survey every Thursday. It's the average rate on thousands of loan applications lenders submitted to Freddie Mac, from the previous Thursday through Wednesday. Think of it as the national rate sheet, averaged.

Here's the deal:

• 30-year fixed. 7.11%, down from 7.18% last week.
• 15-year fixed. 6.45%, down from 6.57%.
• Since the peak. The 30-year average hit 7.40% on October 8 and held there on October 15. It's down 0.29 since.
• A year ago. The 30-year averaged 6.24% and the 15-year averaged 5.49%. Today's 30-year rate is still 0.87 higher.

What does 0.29 buy a borrower? On a $400,000 loan, principal and interest at 7.40% is about $2,770 a month. At 7.11% it's about $2,691. That's roughly $79 a month, or about $950 a year, back in their pocket.

The bigger picture is still a climb. The 30-year average dipped under 6% once this year, to 5.98% on February 26. Then it spent spring and summer creeping up, and jumped from 6.76% on September 10 to 7.40% four weeks later. Four weeks of declines have taken back less than half of that jump.

What it means for rates

Here's the thing about this survey: it's a rearview mirror. This week's 7.11% averages applications from November 5 through November 11. The road ahead looks a little bumpier.

Mortgage rates follow the 10-Year Treasury, the yield the government pays to borrow for 10 years. Mortgage-backed securities, bundles of home loans sold to investors like bonds, trade off that yield. When it climbs, rate sheets usually follow.

And it climbed. The 10-year closed at 4.84% on November 5, then rose to 4.98% by November 10.

Why? Two reports landed in the same week. The October jobs report showed 165,000 new jobs on November 6, and the October Consumer Price Index on November 10 showed prices up 0.4%, with core prices up 0.3% for the third month in a row. A strong job market plus sticky inflation is exactly the combo bond traders don't want. Color me surprised. 😅

So will the streak make it to five? Maybe not. The 10-year's jump on CPI day came near the end of this survey's week, so next week's average will carry more of it. That's an expectation, not a promise. Rates can surprise in either direction.

The Fed isn't riding to the rescue either. At its October 28 meeting, it held its benchmark rate at 3.75% to 4% on a 10 to 2 vote, and both dissenters wanted to raise it. It meets again December 8 and 9.

What to tell your borrowers

1. "Freddie Mac's average 30-year rate was 7.11% on November 12. That's four weekly drops in a row and the lowest in seven weeks."
2. "Rates are still higher than a year ago, when the average was 6.24%. But they're about 0.29 lower than the October peak."
3. "On a $400,000 loan, that drop from the peak is worth about $79 a month in principal and interest."
4. "Bond yields rose after the latest jobs and inflation reports, so this streak could stall. If today's payment works for you, locking takes that risk off the table."
5. "If rates fall further after you buy, refinancing is an option. Finding the right home at a payment you can afford is the part that matters now."

To show a borrower what 7.11% does to their payment, run it in the free mortgage calculator and text them the link. It keeps their numbers, so they see exactly what you see.

What to watch next

• Thursday, November 19: Freddie Mac's next weekly survey, the first to cover a full week after the inflation report.
• Wednesday, November 25: The October PCE price index, the Fed's favorite inflation gauge. Freddie Mac also moves its survey to Wednesday that week for Thanksgiving.
• Friday, December 4: The November jobs report.
• Tuesday and Wednesday, December 8 and 9: The Fed's December meeting.
• Thursday, December 10: November CPI.

Four weeks of lower rates won't make headlines like a rate cut would. But your borrowers' payments notice, even if the news doesn't. 📉