Mortgage rates climbed in November, driven by market volatility and a surge in Treasury yields following the recent elections. On the day after the election results, the 10-year Treasury yield spiked by 14 basis points (bps), setting the stage for further rate increases throughout the month. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage increased 38 basis points from October, reaching 6.81%. Meanwhile, the 15-year fixed-rate mortgage saw an even steeper increase of 43 bps to land at 6.03%. The 10-year Treasury yield, a key benchmark for mortgage rates, averaged 4.37% in November—38 bps higher than October’s average. This increase reflected heightened market uncertainty and persistent volatility. Looking ahead, the Federal Reserve is set to meet on December 17-18 to evaluate the possibility of another rate cut. Since the federal funds rate influences interest rates, a rate cut could potentially ease long-term mortgage rates, but this decision will hinge on the latest employment and inflation data, and other macroeconomic factors that could have an upward pressure on inflation including larger government deficits and higher tariffs. NAHB forecasts additional declines to the federal funds rate into a range below 4%. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

In October, mortgage rates reversed their recent downward trajectory, returning to levels two months earlier. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage increased 25 basis points (bps) from September to 6.18%. The 15-year fixed-rate mortgage saw an even steeper increase of 34 bps to land at 5.60%. These increases coincided with heightened volatility in the 10-year Treasury yield, which jumped 38 bps over the month, moving from 3.72% in September to 4.10%. This spike followed a weaker-than-expected labor report driven by the disruptions from two hurricanes, as well as the Boeing strike, and the 2024 election. However, the largest part of the increase for interest rates is due to growing, post-election concerns over budget deficits. NAHB will be revising its interest rate outlook as the final election results are determined and the fiscal policy position comes into focus. Nonetheless, long-term interest rates have increased since September due to election developments. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.