Mortgage rates fell to 7.24%, but the next Fed move may be a hike

Freddie Mac reported Oct 29 that the 30-year fixed rate averaged 7.24%, down from 7.32% the week before and the lowest reading this month. A year ago the same survey read 6.17%. Realtor.com’s economist credits a pullback in the 10-year Treasury yield, which averaged about 5.02% earlier this week, down from 5.13%.

What does that do to a payment? On a $500,000 loan, principal and interest only, 30-year fixed, the monthly payment at 7.24% is about $3,407, versus about $3,435 at 7.32%. That is roughly $27 a month. Against last year’s 6.17%, the same loan would be about $3,053, which is why the year-over-year gap still stings. These are my own calculations for illustration, not a quote, and the Freddie Mac figure assumes 20% down and excellent credit.

The harder part is what comes next. The Fed held at 3.75% to 4.00% on Oct 28, and CME FedWatch now shows odds of a December hike near 80%, according to Realtor.com. Inflation and jobs data before the December meeting will decide whether rates drift higher or keep easing.

For Central Park, Denver, CO, the practical read is simple. Buyers have choices across all 12 villages, and my live home search shows what is active right now. Price your payment at today’s rate, then ask your lender what a rate lock would cost, since a hike is a live possibility. If you are already under contract or about to be, that conversation is worth having this week.

Want the payment on a specific home? Send me the address and I will run it.