Author: Eric BernsteinPublished:
What once seemed like a slam dunk is now a not so sure thing. With the presidential election just 15 days away and the next Federal Reserve meeting just 17 days away... everyone is wondering - What's going to happen with interest rates?
The answer - as annoying as it may be - is "it depends". It depends on the incoming data. Next week (Oct. 28 - Nov 1) is going to be HUGE for mortgage rates as both PCE (the Fed's favorite inflation measure) and the US employment data reports. Once that data comes in, we should be able to say, with moderate certainty, where interest rates are heading in the near term.
The average rate on a 30-year fixed rate conventional loan stayed mostly flat at 6.45% (up slightly from 6.42 last week)! Sign up for our weekly Friday rate texts to see how much lower our rates are compared to the average!
The $1 Million Starter Home
The answer - as annoying as it may be - is "it depends". It depends on the incoming data. Next week (Oct. 28 - Nov 1) is going to be HUGE for mortgage rates as both PCE (the Fed's favorite inflation measure) and the US employment data reports. Once that data comes in, we should be able to say, with moderate certainty, where interest rates are heading in the near term.
The average rate on a 30-year fixed rate conventional loan stayed mostly flat at 6.45% (up slightly from 6.42 last week)! Sign up for our weekly Friday rate texts to see how much lower our rates are compared to the average!
The $1 Million Starter Home
The typical starter home is over $1,000,000 in 237 cities across 10 states, nearly HALF of those cities come from California and, as you can guess many of them surround major cities like Los Angeles, San Francisco and New York. That's a huge disparity from the nationwide average cost of a starter home, which is just $200k. Check out the graph below to see how $1M homes have exploded in growth from 84 to 237 in just 5 years.
The home affordability problems that have come as a result of the surge in home prices is just one of the reasons why we offer TONS of free homebuying tools to our homebuyers - including homebuying educations courses on YouTube to help get you the best deal.
Single-Family Housing Starts Picks Up
While the headline data shows that housing starts slowed, starts of single-family homes (the ones we care about) climbed 2.7%, the strongest numbers in five months. Multifamily starts slowed dramatically - by 9.4% to a 4 month low - which dragged down the overall numbers.
The larger problem is that the starts report showed completions of new single-family homes decreased 5.7% to a 1.68 million annual pace, while the number of projects under construction slid nearly 2% to an almost three-year low.
Long time readers of this newsletter will know that the biggest problem with housing costs, in my opinion, is that we are still have too little supply on the market to create downward pressure on home prices - that's why we have 237 cities with $1M starter homes. New construction could significantly relieve the supply issue, but that's not happening. With existing and new home sales data coming out this week, we'll get a clearer picture of nationwide supply today.
FED 2ND RATE CUT WATCH
Odds on a rate cut in November have fallen slightly week over week, but not by much. Right now we see a 90.9% chance of a rate cut (down from 92.2%).
Federal Reserve governor Chris Waller said last Monday that the Fed needs to proceed with "more caution" on future cuts given the new data showing a strong job market and hotter-than-expected inflation. Further, Atlanta Fed president Raphael Bostic told the Wall Street Journal that he was “totally comfortable” with holding steady at the Fed's Nov. 6-7 meeting - aka no cuts.
There seems to be a growing amount of Federal Reserve Committee Members who are in favor of not cutting during the November meeting, but we know that can change if upcoming inflation and labor data rolls our way - especially next week's data.
Unique Product Highlights -
As a reminder, here's a highlight of some of our more unique loan products that may be able to help you. If you want more information, click the links for more information or send me an email!
Buy before you sell - giving current homeowners the opportunity to tap into their current home's equity to buy their new house without having to sell their current house. Removes the stress of trying to coordinate the perfect transaction or double moves.
Odds on a rate cut in November have fallen slightly week over week, but not by much. Right now we see a 90.9% chance of a rate cut (down from 92.2%).
Federal Reserve governor Chris Waller said last Monday that the Fed needs to proceed with "more caution" on future cuts given the new data showing a strong job market and hotter-than-expected inflation. Further, Atlanta Fed president Raphael Bostic told the Wall Street Journal that he was “totally comfortable” with holding steady at the Fed's Nov. 6-7 meeting - aka no cuts.
There seems to be a growing amount of Federal Reserve Committee Members who are in favor of not cutting during the November meeting, but we know that can change if upcoming inflation and labor data rolls our way - especially next week's data.
Unique Product Highlights -
As a reminder, here's a highlight of some of our more unique loan products that may be able to help you. If you want more information, click the links for more information or send me an email!
Buy before you sell - giving current homeowners the opportunity to tap into their current home's equity to buy their new house without having to sell their current house. Removes the stress of trying to coordinate the perfect transaction or double moves.
Home Loans For Entrepreneurs and Business Owners - Streamlined and easy loan process for people who aren't W2 employees. No tax returns required. Just bank statements and you won't be buried in paperwork!
Home Loans For Retirees - So many retirees worry they have to rent for life if they move because they'll never qualify for a mortgage. This loan program dispels those myths. We can easily qualify you and help you buy a home wherever you want.
Key reporting dates this week:
Mon, 10/21: Fed Presidents speaking
Tues, 10/22: Philadelphia Fed President Patrick Harker speaks
Wed, 10/23: Existing home sales, Fed Beige Book
Thurs, 10/24: Initial jobless claims, New home sales
Fri, 10/25: Durable-goods orders
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About the Author:
Eric Bernstein is the President and Co-Founder of LendFriend Mortgage, where he helps homebuyers make smarter, more confident decisions in today’s fast-moving housing market. With over a decade of experience guiding hundreds of clients—from first-time buyers to seasoned investors—Eric brings a mix of market insight, strategy, and personalized service to every mortgage transaction. Each week, Eric breaks down the housing and economic headlines that matter, giving readers a clear, no-fluff view of what’s happening and how it might impact their buying power.