Mortgage rates ease a third week as jobs data tests a split Fed
The 30-year fixed averaged 7.18% this week, Freddie Mac says, still nearly a point above last year. Friday's October jobs report is the next test for a Fed that held rates with two votes for a hike.
By American Policy WireFiled
The bottom line Mortgage rates have slipped three weeks running, but a Fed with two votes for a hike makes Friday's jobs report a real test of whether that relief lasts.
Mortgage rates fell for a third straight week, with the 30-year fixed averaging 7.18% in Freddie Mac’s survey released Thursday [3]. The bigger question for buyers sits on Friday’s calendar: the October jobs report lands a week after a Federal Reserve that held rates steady, with two officials voting to raise them [1, 4].
Why it matters: Borrowing costs are still far above where they were a year ago, and the Fed has not ruled out going higher. Two of twelve voters wanted a quarter-point hike in October, a sign that strong economic data could tip the committee further toward tightening [1]. A hot or cool jobs number on Friday feeds directly into that debate [4].
By the numbers
- 7.18%: The 30-year fixed average this week, down from 7.24% last week and up from 6.22% a year ago [3].
- 6.57%: The 15-year fixed average, down from 6.60% last week and up from 5.50% a year ago [3].
- 3.75% to 4.00%: The federal funds target range the Fed kept in place on October 28, the level it set with a unanimous quarter-point hike on September 16 [1, 2].
- 10 to 2: The October vote. Lisa D. Cook and Beth M. Hammack dissented, preferring a quarter-point increase [1].
- 4.75%: Where the 2-year Treasury yield traded after the decision, up 2.7 basis points, according to investingLive’s market wrap [6].
What the Fed said: The committee described inflation as still “elevated” and said economic activity is growing strongly, with robust capital investment and job gains keeping pace with the workforce [1]. investingLive noted the statement upgraded its description of growth to “strong” from “solid,” and that Hammack also voted for a hike at the July meeting [6]. Traders had priced only about a 7% chance of an October hike by decision time, with little guidance from Chair Kevin Warsh, according to the same report [6].
What it means for buyers and owners:
- Relief is real but modest. This week’s 30-year average is 6 basis points lower than last week’s [3]. The 30-year average remains close to a full point above year-ago levels [3].
- The direction of policy is still open. The Fed raised rates in September, and its October statement said more information will help it set policy to bring inflation back to its 2% goal [1, 2]. Borrowers comparing locks and floats are weighing that uncertainty, not a settled path.
- Flood zones have a second deadline. The National Flood Insurance Program is authorized only through December 11, 2026, matching the stopgap funding bill [7, 8]. FEMA says that in a lapse it “would stop selling and renewing policies,” though it could still pay valid claims [7]. FEMA cites a National Association of Realtors estimate that about 1,300 property sales a day are affected [7]. Buyers closing in flood zones after December 11 face that risk if Congress does not act.
What’s next: The Bureau of Labor Statistics releases the October Employment Situation on Friday, November 6, at 8:30 a.m. Eastern [4]. Minutes of the October meeting are due about three weeks after the decision, and the Fed’s next policy meeting is December 8-9, which will include fresh economic projections [5].
The other side: Ten of twelve voters backed holding rates, so the hike camp remains a minority [1]. And mortgage rates have fallen three weeks in a row even as two officials push for tighter policy [3].