As the October inflation report drove down the yield on the 10-year Treasury, mortgage rates proceeded to fall this week, and healthier economic data is a positive sign that better days lie ahead for the housing market.
According to Freddie Mac's Primary Mortgage Market Survey, the 30-year, fixed mortgage averaged at 7.44% as of Nov. 16, down six basis points from 7.5% last week and up from 6.61% the same week a year ago, HousingWire reports.
However, there is room for mortgage rates to fall further, according to Bright MLS Chief Economist Lisa Sturtevant. Historically, the gap between the 10-year Treasury yield and the 30-year fixed rate mortgage rate hovered around 180 basis points. The current 30-year mortgage rate remains 280 basis points higher than the bond yield.
“The combination of continued economic strength, lower inflation and lower mortgage rates should likely bring more potential homebuyers into the market,” Sam Khater, Freddie Mac’s chief economist, said in a statement.