US 30-year mortgage rate plunges by most in nearly 16 months

WASHINGTON, Nov 09 (Reuters): The interest rate on the most common type of US residential mortgage plunged last week by the most in nearly 16 months on the back of a rally in the Treasury market that drove down the benchmark yields used to set home loan costs.
The Mortgage Bankers Association (MBA) on Wednesday said the average contract rate on a 30-year fixed-rate mortgage dropped in the week ended Nov. 3 by a quarter per centage point to 7.61 per cent, the lowest in about a month. It was the largest weekly drop since late July 2022.
The second weekly decline further pulled home-purchasing borrowing costs down from two-decade highs near 8 per cent reached in October when yields on the 10-year Treasury note, the benchmark for US home loan rates, had been charging higher.
That months-long updraft in yields saw a sharp reversal last week after the US Treasury said upcoming debt issuance would be somewhat less than previously expected and the Federal Reserve left its key overnight policy rate on hold for a second straight meeting.
"Last week's decrease in rates was driven by the US Treasury's issuance update, the Fed striking a dovish tone in the November FOMC (Federal Open Market Committee) statement, and data indicating a slower job market," said Joel Kan, the MBA's vice president and deputy chief economist.