Due to the government shutdown in the United States leading to the delayed release of key economic data, the mortgage market has entered a state of uncertainty, with long-term mortgage rates seeing a slight decline this week. According to the latest data from mortgage agency Freddie Mac, the average rate for a 30-year fixed-rate mortgage dropped to 6.30%, lower than the previous week’s 6.34%; while the rate for a 15-year fixed-rate mortgage decreased to 5.53%, lower than the previous rate of 5.55%.
On Thursday, October 9th, Yahoo Finance reported that analysts pointed out that during the government shutdown period, market assessments of economic trends and inflation prospects became more difficult, leading to rates being trapped in a narrow range of fluctuations.
Kara Ng, Senior Economist at Zillow, stated, “With the government shutdown delaying the release of major economic data, the market is relying on alternative sources of information, which may be the reason behind the narrowing range of mortgage rate fluctuations over the past week.”
As the U.S. Department of Labor and the Department of Commerce halted the release of various statistical reports, including employment data, inflation figures, and retail sales, the market lost a fundamental basis for evaluating the economy.
Analysis from Realtor.com indicated that this has led investors and lending institutions to lean towards maintaining the status quo, resulting in a lack of direction in mortgage rates in the short term.
Anthony Smith, Senior Economist at Realtor.com, stated in a press release, “For potential homebuyers, the current stability in rates provides reassurance, but broader uncertainties may impact consumer confidence.”
Experts have pointed out that mortgage rates are closely related to U.S. ten-year Treasury yields. Faced with political deadlock and fiscal uncertainty, some investors are turning to safe-haven assets, driving up bond prices and pushing down yields, subsequently lowering mortgage rates.
On the other hand, demand for home purchase and refinancing has noticeably cooled in the autumn. According to National Mortgage News on Thursday, October 9th, many potential buyers are choosing to postpone purchases due to uncertain economic prospects, resulting in a decrease in market transaction volume and putting pressure on rate declines.
Based on data from the Mortgage Bankers Association, refinancing mortgage applications decreased by 8% compared to the previous week, while purchase applications declined by 1% this week.