The benchmark 30 Year Fixed Rate mortgage dropped fifteen basis points to average 4.130% for the 4th week of October. The rate is comprised from secondary industry giant Freddie Mac’s (Federal National Mortgage Corporation) rate survey as provided by lenders it does business with.
The Shut Down
The drop in rates comes on the heels of the government resuming operations after being shut down. The impact resulted in negative consequences on the U.S. economy. Overall, consumer confidence was also impacted as spending declined. These factors as well as a tepid monthly employment report which was delayed and reported several weeks late due to the shutdown are several factors mentioned in justifying the drop in rates.
Preparing for Holidays
While the rates are welcome news for consumers purchasing a new home or refinancing their existing mortgage, lenders unfortunately reported a drop in mortgage applications. Traditionally the appetite for mortgages slows during the fourth quarter. Many consumers are switching gears and preparing for the holiday season so the trend of low rates and low applications is part of the fall season. The 15 Year Mortgage also dropped nine basis points and is now at 3.240%
The complete list of rates are here.