Mortgage rates increased slightly across the board, even as the Dow Jones Industrial Average fell nearly 1,000 points over the past few days, according to Freddie Mac.
The decline in the stock market put some volatility into the bond market at the start of the week as investors sought safety for their money.
“Often stock market instability pushes mortgage rates lower, as investors seek safe-haven,” Aaron Terrazas, senior economist at Zillow, said when that company released its own rate tracker on Oct. 24. “However, the reaction was mostly muted this week, suggesting that a return to rising rates could very well be on the horizon. Continued uncertainty on Wall Street may prompt a more significant retreat if the stock downturn deepens or prolongs, but for now rates are holding firm.”
The 30-year fixed-rate mortgage averaged 4.86% for the week ending Oct. 25, up from last week when it averaged 4.85%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.94%.
“Despite volatility in the stock market, the 30-year fixed-rate mortgage inched forward just 1 basis point this week,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “We expect rates to continue to rise, which will put downward pressure on home buying activity. While higher borrowing costs will keep some people out of the market, buyers with more flexibility could take advantage of the decreased competition.”
The 15-year fixed-rate mortgage this week averaged 4.29%, up from last week when it averaged 4.26%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.25%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14% with an average 0.3 point, up from last week when it averaged 4.1%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.21%.
“A slow week in economic data releases picks up on Friday with 3Q advanced GDP data. Strong data could be another signal for mortgage rates to return to their upward trajectory,” Terrazas said.