Mortgage Interest Rate Report - November
Last Updated: 10/30/2009

Mortgage Rate News & Analysis

As gleeful buyers looked on, long-term interest rates moved back down into the 4 percent range in October, according to numbers from the mortgage finance giant Freddie Mac.

October 1

The average rate on a 30-year fixed rate mortgage (FRM) dropped under the 5 percent threshold on the first day of the month, to 4.94 percent, excluding points, down from 5.04 percent the previous week. The average rate on a 15-year FRM fell to 4.36 percent from 4.46 percent and the one-year adjustable rate mortgage (ARM) carried an average rate of 4.49 percent, down from 4.52 percent.

October 8

During the second week, rates continued their descent with the 30-year FRM falling to 4.87 percent and the 15-year FRM dropping to 4.33 percent. The one-year ARM, however, rose to 4.53 percent.

"Long-term mortgage rates eased further this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Interest rates for 30-year fixed-rate loans were the lowest since mid-May. 15-year FRMs were at a record low since data was first collected in 1991."

October 15

Rates edged upward during the third week, as 30-year FRMs averaged 4.92 percent, and 15-year FRM rates rose to 4.37 percent. One-year ARMs also continued to rise, up to 4.60 percent.

October 22

The average on a 30-year FRM moved back up to 5.0 percent the next week, with the 15-year FRM rising to 4.43 percent. The one-year ARM dropped to 4.54 percent.

"Following bond yields, long-term mortgage rates edged up slightly this week," said Nothaft. "Although rates for [ARMs] are around half a percentage point below 30-year fixed mortgages, consumers appear to be seeking the stability of fixed-rate mortgages. According to the Mortgage Bankers Association, ARMs averaged only about 6 percent of the number of mortgage applications in September and October thus far."

What's Next for Interest Rates?

Although anything is possible, the Federal Reserve during its late September meeting said,"With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time." The Committee "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period." So the Fed won’t be raising rates for awhile, but certainly other changes in the markets, like bond yields, could cause an increase.

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