Weekly Mortgage Rate Update

Weekly Mortgage Rate Overview: October 17th, 2008

In the midst of a global financial crisis, the week of October 17th, 2008, stood as a crucial period for the mortgage industry. This article provides an overview of the mortgage rates during that week and their significance in the broader context of the financial crisis.

Context of the 2008 Financial Crisis

The latter part of 2008 was marked by extreme volatility in financial markets worldwide. Triggered by the collapse of major financial institutions and the bursting of the housing bubble, this period saw a sharp decline in consumer confidence and a freeze in credit markets.

Mortgage Rates on October 17th, 2008

During the week of October 17th, mortgage rates experienced significant fluctuations. The rates for 30-year fixed mortgages, a standard benchmark in the housing market, were particularly volatile. This was a direct response to the uncertainty in the financial markets and the government’s efforts to stabilize the economy.

Impact of the Federal Reserve’s Actions

The Federal Reserve played a pivotal role in influencing mortgage rates during this time. In an attempt to ease the credit crisis and stimulate the economy, the Fed had cut the federal funds rate multiple times throughout the year. These actions, while aimed at stabilizing the market, contributed to the fluctuations in mortgage rates.

Investor Sentiment and Mortgage-Backed Securities

Investor sentiment towards mortgage-backed securities, a key factor in determining mortgage rates, was extremely cautious. The collapse of these securities was a major factor in the financial crisis, leading to a higher perceived risk and consequently affecting the mortgage rates.

The Government’s Response

In response to the crisis, the U.S. government implemented several measures, including the Troubled Asset Relief Program (TARP) and interventions by the Federal Reserve. These actions were intended to restore confidence in the financial system and to bring stability to the mortgage markets.

Long-Term Fixed Rates vs. Adjustable Rates

During this period, there was a notable difference in the behavior of long-term fixed rates compared to adjustable rates. Fixed rates were influenced more by government policy and investor sentiment, while adjustable rates were more directly tied to short-term market fluctuations.


The week of October 17th, 2008, was emblematic of the challenges faced by the mortgage industry during the financial crisis. The fluctuating mortgage rates reflected the uncertainty and instability of the broader economy. This period serves as a reminder of the interconnectedness of global financial systems and the impact of economic policies on everyday financial products like mortgages.

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