a for sale sign is posted in front of a single family home on october 27 2022 in hollywood florida mortgage rates fell sharply thursday after a government report showed that inflation had cooled in october prompting a decline in bond yields  the average rate on the 30year fixed plunged 60 basis points from 722 to 662 according to mortgage news daily that matches the record drop at the start of the covid 19 pandemic the rate however is still more than double what it was at the start of this year in turn stocks of homebuilders such as lennar dr horton and pulte jumped along with broader market gains those stocks have been hammered by the sharp increase in rates over the past six months the consumer price index rose in october at a slower pace than expected as a result bond yields dropped sharply and mortgage rates followed as they follow loosely the yield on the 10year treasury so what happens next this is the best argument to date that rates are done rising but confirmation requires next months cpi to tell the same story said matthew graham chief operating officer of mortgage news daily this was always about needing two consecutive reports of this nature combined with acknowledgement from the fed that the inflation narrative is shifting but graham said rates are not out of the woods yet they are also unlikely to move dramatically lower as there is still plenty of economic uncertainty both in us and global financial markets