Mortgage rates plunge to below 7% as inflation declines.

After a government report revealed that inflation had slowed in October, mortgage rates fell significantly on Thursday.

According to Mortgage News Daily, the 30-year fixed rate average dropped by 60 basis points, from 7.22% to 6.62%.

However, the rate is still more than twice as high as it was at the beginning of the year.

Mortgage rates dropped dramatically. On Thursday, bond yields dropped after a government report revealed that inflation had decreased in October.

According to Mortgage News Daily, the 30-year fixed rate average dropped by 60 basis points, from 7.22% to 6.62%. That is the same decline as the Covid 19 pandemic’s record low. However, the rate is still more than twice as high as it was at the beginning of the year.

As a result, along with market gains overall, homebuilder stocks such as Lennar, DR Horton, and Pulte rose. The sharp rise in rates over the previous six months has severely hurt those stocks.

In October, the Consumer Price Index increased more slowly than forecast. Because mortgage rates loosely follow the yield on the 10-year Treasury, bond yields fell sharply as a result.

What follows then?

According to Matthew Graham, chief operating officer of Mortgage News Daily, “this is the best argument to date that rates are done rising, but confirmation requires that next month’s CPI tell the same story.” It has always been necessary to have two reports of this nature in quick succession, along with Fed’s recognition that the inflation story is changing.

Graham, however, claimed that rates are still in danger. The fact that there is still a great deal of economic uncertainty in both the U.S. and international financial markets makes it unlikely that they will decline significantly.

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