Mortgage rates

Construction of single-family houses jumped 18% to the highest level since April 2022, while starts of multifamily projects increased 6.9%.

The report showed the gauge of prospective buyer traffic also climbed for the first time in five months, while a measure of expected sales reached a three-month high.

The enterprise is now calling for a recession to start in the second quarter of next year, with negative growth expected for the full year.

The upcoming election exposes the Federal Reserve to heightened criticism for its actions, said Brookings Institution senior fellow Sarah Binder.

Pending sales also increased in November as mortgage rates began to decline during the month, but cancellations reached a new record during the month.

Hear what your peers are thinking and doing as the new year approaches paired with thoughtful analysis by your National Mortgage News team.

The Fed's announcement is responsible for a 19 basis point drop in the 10-year yield over a two-day period, pushing the 30-year fixed under 7% for the first time since August, Freddie Mac said.

The Federal Reserve held interest rates steady for a third meeting and gave its clearest signal yet that its aggressive hiking campaign is finished by forecasting a series of cuts next year.

Recent economic data pushed investors toward Treasurys over the past week, driving 10-year yields to as low as 4.1%.

Heightened government-backed activity also helped bring the average loan size down to its lowest mark in 2023, with purchase amounts falling below $400,000 for the first time since January, the Mortgage Bankers Association found.

Only 62% of likely purchasers surveyed in October were waiting to act in expectations of declines, down from 85% in April.

The 30-year average declined for the fifth consecutive week, as purchase demand picking up at the same time, according to Freddie Mac.

Of the top five factors influencing a home buying decision, an Assurance IQ survey of real estate agents said price and affordability was at the top, followed by financing & mortgage options.

Even if the 30-year fixed were to slip further to 6.4%, it is not enough to end the seller's strike, economists said.

The market's reaction to the Consumer Price Index report on Tuesday helped to push the 10-year Treasury and 30-year fixed-rate loan lower, Freddie Mac said.

Applications to purchase newly constructed properties increased for the ninth consecutive month on an annual basis, as the inventory shortage for existing homes continues.

By the end of 2024 traders now see the U.S. central bank slashing rates by a full percentage point, despite officials repeatedly warning markets that they're in no rush to cut rates.

Broader economic factors, including growing household debt, are also likely to keep the housing market stagnant, Freddie Mac said.

But the Fannie Mae Home Purchase Sentiment Index still rose in October versus both September and the prior year.

The broader economy added 150,000 positions, a number the bond market initially read as likely to soften rates, but some economists interpreted differently.