Mortgage rates were up again this past week in the Freddie Mac Weekly Survey and continue at 20 year highs. The 30 Year Fixed Rate Mortgage was at 6.94% in the Freddie Mac survey results and the 15 Year Fixed Rate Mortgage was at 6.23%. Rates are still very volatile day to day and even intraday.
Please note that Freddie Mac will change how it collects and reports its rate survey starting in November. It will be interesting to see how this change affects reported rates, as the current methodology seems recently to be understating actual rates.
The Fed Funds Rate target rate went up by another 0.75% last month and is expected to rise again by the same amount in early November due in part to the high CPI number released earlier today. The Fed was expected last month to start reducing the amount of mortgage and treasury securities on its balance sheet by $95 billion every month, which they refer to as tapering or QT (quantitative tightening.) Just like its weak approach throughout the summer tapering, the Fed is off to a very unimpressive and tepid start to QT. In fact, mortgages held by the Fed were down only $11 billion last month (vs. $35 billion target) and treasury securities have only been reduced by $22 billion last month (vs. $60 billion target.) (See charts below)
The Fed is not reducing it mortgage securities portfolio as planned. Mortgage rates are likely to remain volatile in this uncertain environment as the Fed tries to navigate this last part of the year and regain some credibility. It remains difficult to predict what may happen to rates if or when the Fed starts to taper according to its actual plan.
(dynamic charts with current data)
Freddie Mac’s Weekly Survey was released this morning with its most recent assessment of the mortgage rate landscape. See the details of their survey below.
(dynamic chart with current data)