In October, mortgage rates reversed their recent downward trajectory, returning to levels two months earlier. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage increased 25 basis points (bps) from September to 6.18%. The 15-year fixed-rate mortgage saw an even steeper increase of 34 bps to land at 5.60%.

These increases coincided with heightened volatility in the 10-year Treasury yield, which jumped 38 bps over the month, moving from 3.72% in September to 4.10%. This spike followed a weaker-than-expected labor report driven by the disruptions from two hurricanes, as well as the Boeing strike, and the 2024 election.

However, the largest part of the increase for interest rates is due to growing, post-election concerns over budget deficits. NAHB will be revising its interest rate outlook as the final election results are determined and the fiscal policy position comes into focus. Nonetheless, long-term interest rates have increased since September due to election developments.