The average 30-year fixed rate mortgage was 6.25% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.31%, the same as one the day before. The 30-year FHA mortgage averaged 5.56% yesterday, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate was 6.61%, reflecting no change.
The bigger picture
Pretty much everyone expects the Federal Reserve to unveil a 0.25% (25-basis-point) cut in general interest rates at 2 p.m. Eastern on Wednesday. The CME FedWatch tool, based on investors' purchases of Fed funds futures (effectively wagers), put the chances at 98.3% over the weekend.
Owing to that near-certainty, a quarter-point cut is already baked into mortgage rates. So, those are unlikely to move on the announcement, assuming the Fed delivers what everybody expects.
Of course, there's always a slim chance of the central bank surprising markets. A shock no-cut announcement would likely send mortgage rates higher, while an outsize 0.5% reduction would typically push them downward. But both of those look highly unlikely.
Fed's December meeting
Markets are almost as confident that the Fed will make a second quarter-point cut at its following meeting on December 21 as they are about Wednesday's outcome. The CME FedWatch tool puts the chances of that at 91.1%.
To us, that looks much more contentious. True, at the Fed's September meeting, a majority of decision-makers thought two further cuts this year were likely.
But it was the slimmest of majorities. Ten voting members thought two cuts probable, while nine thought one or zero cuts more likely.
So, a second cut isn't the foregone conclusion investors seem to think. As CNBC put it a couple of years ago, "Take the Fed forecast with a grain of salt. It has a terrible track record."
The big event on Wednesday may well turn out to be a news conference that afternoon hosted by Fed Chair Jerome Powell. If he is upbeat and confirms the likelihood of a December cut, mortgage rates might fall. But, if he suggests such a cut is much less probable than investors think, those rates could rise.
Government shutdown
"The ongoing government shutdown is now the second longest in history," reports CBS News. "It will become the longest on record on Day 36, which would be Nov. 5."
Pressure is mounting on legislators to reopen the government, as more programs and services look set to crumble. "If the shutdown continues past Oct. 27, funding for the SNAP food assistance program will run out in Texas, meaning benefits will not be provided for November," continues CBS News. "That will impact 3.5 million Texans, including 1.7 million children, which reportedly translates to $614 million."
Meanwhile, investors and the Fed are desperate for access to official data, the publication of which is almost entirely suspended during the shutdown. However, there is little sign yet of legislators on Capitol Hill responding to any pressure.
Democrats have dug into their position of defending enhanced premium tax credits for those covered under the Affordable Care Act, aka Obamacare. " ... expiration of the enhanced premium tax credits is estimated to more than double what subsidized enrollees currently pay annually for premiums — a 114% increase from an average of $888 in 2025 to $1,904 in 2026," reckons the Kaiser Family Foundation.
Republicans say the subsidies, at more than $30 billion annually, are unaffordable and claim that undocumented migrants are gaming the system. While this may see millions of American citizens losing their health insurance, it's the fiscally responsible option, they say.
"So Congress is left with a choice: keep subsidies generous to maintain broad coverage or scale them back and accept higher uninsurance," says the Harvard Kennedy School. "There’s no easy way around that."
The period of the government shutdown has seen mortgage rates drift gently lower. And we doubt that's a coincidence.
But be aware that those rates tend to fall when the economy is deteriorating. So, lower mortgage rates come at a cost.
Trade squabbles with China and Canada
New tariff rates for imports from Canada were announced by the government on Saturday. They are set to rise by 10% across the board.
However, new optimism about the U.S. and China reaching a more favorable trade agreement was in the air yesterday and overnight.
We'll have to wait to see how the news surrounding these evolves and what its effect will be on mortgage rates.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.25% | 6.28% | +0% | -0.16% |
| 15-Year Fixed | 5.31% | 5.36% | +0% | -0.17% |
| 30-Year Fixed FHA | 5.56% | 6.77% | +0% | -0.14% |
| 30-Year Fixed VA | 5.69% | 5.83% | +0% | -0.11% |
| 30-Year Fixed USDA | 5.48% | 5.62% | +0% | -0.28% |
| 30-Year Fixed Jumbo | 6.61% | 6.63% | +0% | -0.16% |
| 5/6 Year ARM | 6.17% | 6.21% | +0% | -0.2% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.35% | 6.38% | +0% | -0.14% |
| 15-Year Fixed | 5.28% | 5.33% | +0% | -0.18% |
| 30-Year Fixed FHA | 5.51% | 6.72% | +0% | -0.14% |
| 30-Year Fixed VA | 5.72% | 5.86% | +0% | -0.1% |
| 5/6 Year ARM | 6.26% | 6.29% | +0% | -0.14% |
What's coming up?
Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning employment, inflation, tariffs and deficit funding are especially influential at the moment.
The shutdown means almost no official economic data will be published until the government reopens. So far, there has been only one exception: The delayed September consumer price index was published on Oct. 24. Nothing else is expected to be released before the shutdown ends.
Mortgage rates today
There are no economic reports on today's MarketWatch economic calendar.
For most reports, higher-than-expected figures tend to push mortgage rates upward, while lower-than-expected ones usually drag them downward.
