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Mortgage rates declined sharply Thursday after a government report showed that inflation had cooled in October, prompting a slump in bond yields.

The average rate on the 30-year fixed dipped 60 basis points from 7.22% to 6.62%, according to Mortgage News Daily. That matches the record drop at the start of the Covid 19 pandemic. 

In turn, stocks of homebuilders such as Lennar, DR Horton, and Pulte soared, along with broader market gains. Those stocks have been hit by the sharp increase in rates over the past six months.

The Consumer Price Index surged in October at a slower pace than expected. As a result, bond yields fell dramatically, and mortgage rates followed, as they followed the yield on the 10-year Treasury loosely.

“This is the best argument to date that rates are done rising, but confirmation requires next month’s 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 unlikely to move dramatically lower, as there is still plenty of economic uncertainty both in U.S. and global financial markets.