Mortgage rates were up this past week in the Freddie Mac Weekly Survey. The 30 Year Fixed Rate Mortgage was at 6.92% in the Freddie Mac survey results and the 15 Year Fixed Rate Mortgage was at 6.09%. Rates are still very volatile day to day and even intraday.
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.) Fed assets are virtually unchanged this week in an environment where we were told to expect on average over $20 billion reductions each week. (See charts below) We have been following this for a while and it’s becoming clearer that something is up that has the Fed scared to execute it’s plan.
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)