Mortgage rates fall for a second week but stay more than a point above last year's

The average rate on a 30-year fixed mortgage in the United States fell to 7.24% in the week ended October 29 from 7.32% the week before, the second weekly decline in a row, according to Freddie Mac's Primary Mortgage Market Survey. The reading is still 1.07 percentage points above a year earlier (computed).

What happened

The 30-year fixed-rate mortgage averaged 7.24%, Freddie Mac said, "down from last week when it averaged 7.32%. A year ago at this time, the 30-year FRM averaged 6.17%." The decline from the previous week is 0.08 percentage point (computed).

The 15-year fixed-rate mortgage averaged 6.60%, down from 6.68% a week earlier and up from 5.41% a year earlier, a difference of 1.19 percentage points (computed). Freddie Mac said the 30-year rate reached its lowest level of October and "modestly" boosted purchasing power for prospective buyers.

The survey is released on Thursdays at noon ET and averages loan rates offered from the previous Thursday through Wednesday, according to Freddie Mac. It is based on applications submitted to the company through its Loan Product Advisor system.

Why it matters

The 30-year rate peaked at 7.40% in the weeks of October 8 and October 15, according to Freddie Mac's historical series. The new reading is 0.16 percentage point below that peak (computed). It is the lowest since the week of September 24, when the average was 7.03%, and 0.21 percentage point above that level (computed).

Rates remain far above this year's low. The 30-year average was 5.98% in the week of February 26, so the latest reading is 1.26 percentage points higher (computed from the series).

The decline came as Treasury yields were lower. According to Treasury Department data, the 10-year Treasury yield closed between 4.96% and 5.05% on the five trading days from October 22 to October 28, an average of 5.00% (computed). In the five trading days from October 15 to October 21 it closed between 5.09% and 5.15%, an average of 5.12% (computed), a difference of 0.12 percentage point. Freddie Mac's survey does not attribute the decline to any single cause.

What to watch

Freddie Mac publishes the survey every Thursday at noon ET, according to the company. The Federal Reserve's policy committee met on October 27-28 and next meets on December 8-9, according to the Fed's meeting calendar; FinanceInTime reported the October decision.

The survey's weekly readings in October moved between 7.24% and 7.40%, according to the history series. If Treasury yields rise again, as they did in late September and early October, the weekly average could turn higher; if they keep easing, it could extend its decline. The weekly figure is an average of the prior week's rates and is not a forecast.