The big news this week is fantastic: mortgage rates hit their lowest level in over a year!
I know the news can be overwhelming and often scary, so I want to break down what’s driving this exciting movement and—more importantly—what it means for you, whether you’re looking to buy your first home, refinance, or simply stay informed for your clients or referrals.
Market Movers: What Pushed Rates Down?
The average 30-year fixed-rate mortgage dropped .08 percent according to Freddie Mac’s weekly survey; a full .35 percent lower than this same time last year.
We saw this positive shift thanks to a few moving parts.
Global Tensions Eased (Briefly): News of an Israel-Hamas ceasefire helped ease geopolitical risk, which put downward pressure on oil prices. Since high oil prices tend to signal inflation and push rates up, this calmness allowed both crude prices and interest rates to drop to their lowest levels of the year.
Gold’s Volatility: When gold prices—a sign of investor anxiety—pulled back from record highs, some of that money flowed into the bond market. Higher bond prices mean lower yields, and lower yields typically translate to lower mortgage rates.
The Power of the Trend: Our U.S. bond market has been on a positive, lower-yield trend since May, and as long as that trend stays intact, it provides a supportive environment for lower mortgage rates moving forward.
The October Fed Meeting
The Federal Reserve officially cut the federal funds rate by 0.25% today. While this particular rate doesn’t directly set mortgage rates, it does signal a continued focus on supporting economic growth and controlling inflation.
Because the bond market had already anticipated this move, mortgage rates didn’t experience a dramatic drop immediately after the announcement. However, this rate cut reinforces the downward trend we’ve seen since spring, keeping conditions favorable for homebuyers and homeowners alike. I’ll be watching this closely and will keep you informed!
Actionable Insight: You’re in the Driver’s Seat for Savings
With rates at their lowest point in over a year, the good news is that prospective buyers are seeing an increase in their purchasing power. For example, a homebuyer on a $3,000 monthly budget can now afford about $9,500 more in home price than they could have just one month ago.
But here’s the most important takeaway, and one I always want to stress: You have significant control over your final mortgage cost!
Recent analysis shows that the choices a borrower makes can lead to tens of thousands of dollars in savings over the life of the loan.
Have me shop around for you: This is the easiest and most powerful move. The difference between the highest and lowest rate offers across lenders can be as much as 0.55 percentage points. On a typical loan, this could save you over $43,000! Never take the first offer.
Credit Score Milestones: The biggest rate improvement comes from moving your credit score from “Good” (660-720) to “Very Good” (720-760). Even this moderate jump can yield thousands in savings.
Down Payment Power: Saving enough to move from a 10 percent to a 20 percent down payment not only reduces your loan amount but can significantly improve your rate, potentially adding up to over $100,000 in lifetime savings.
Even in this changing market, focusing on these controllable factors—your credit, your savings, and comparing offers—is the best strategy for getting the best possible mortgage.
My mission is to be a consistent source of reliable information and professional support for you and your network. Please feel free to reach out if you have any questions about this week’s market news, or if you or a client are considering taking advantage of these lower rates. As always, you’re welcome to call/text me at 818.307.6072 or simply send me an email.
