The average 30-year fixed rate mortgage is 6.32% today, an increase of 0.16% since yesterday. The 15-year fixed mortgage rate stands at 5.42%, up by 0.12%. The 30-year FHA mortgage now averages 5.59%, having risen by 0.15. Meanwhile, the 30-year jumbo mortgage rate is 6.78%, reflecting an increase of 0.11%.
The bigger picture
Fed rate cut
As everyone expected, the Federal Reserve yesterday cut general interest rates by 25 basis points (0.25%). That change had been baked into mortgage rates some time ago, so it barely moved them that day.But move they did — and sharply, according to some sources. Mortgage News Daily reckons those for 30-year fixed-rate mortgages jumped 14 basis points to 6.27% from Tuesday's 6.13%. That's a lot in a single afternoon.
News conference roils markets
As we wrote yesterday, "Fed Chair Jerome Powell is due to host a news conference. And his words could easily push mortgage rates sharply higher or lower." We went on to say investors would be looking for hints as to how likely the Fed was to stick to the rate-cutting timetable it set out last month.Powell's answer was not what Wall Street wanted to hear. According to the official transcript, he said:
"We will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook, and the balance of risks. We continue to face two-sided risks. In the Committee’s discussions at this meeting, there were strongly differing views about how to proceed in December. A further reduction in the policy rate at the December meeting is not a forgone conclusion — far from it. Policy is not on a preset course."
In other words, December's Fed rate announcement is at best a toss-up. That sent markets into uproar.
"All three major U.S. stock indexes ... fell into the red as Powell’s afternoon press conference got underway," reported MarketWatch. " ... The drop in equities occurred even after the Fed delivered a widely expected quarter-point interest-rate cut and announced the end of its quantitative-tightening program in December. ... Bond yields popped across much of the Treasury curve ... Of note, the 10-year Treasury yield [which mortgage rates often shadow] jumped 7.4 basis points to almost 4.06%, its highest 3 p.m. Eastern level in almost three weeks." That yield ended the day at 4.08%.
Rapidly changing odds of big December rate cut
Unsurprisingly, the reaction reflected by the CME FedWatch tool was swift and decisive. This, you may remember, is based on investors' trades in Fed fund futures, so it is their putting their money where their mouths are. Think of it as a betting website for experts.Following Powell's news conference, the tool put the chances of a 50-basis-point cut on December 10 at 0.00%, compared with yesterday's odds of 90.5%. (No, really!).
The tool now puts the chances of another 25-basis point cut in December at 67.8% and of no cut that month at 32.2%.
Insufferably smug
So, a second cut isn't the foregone conclusion investors seem to think. ...
"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."
U.S. - China summit
"As U.S. President Donald Trump and China's leader Xi Jinping prepare to kick off talks on Thursday, U.S. negotiators have signaled they seek a return to a fragile trade war truce, but tensions remain high and longer-term economic irritants will likely persist between the geopolitical rivals," reports Reuters.
We suspect that a successfully finalized trade deal might push mortgage rates yet higher. However, a failure to reach an agreement might help those rates fall back.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.32% | 6.34% | +0.16% | -0.06% |
| 15-Year Fixed | 5.42% | 5.46% | +0.12% | +0.02% |
| 30-Year Fixed FHA | 5.59% | 6.8% | +0.15% | -0.07% |
| 30-Year Fixed VA | 5.75% | 5.89% | +0.13% | +0.01% |
| 30-Year Fixed USDA | 5.73% | 5.87% | +0.2% | +-0% |
| 30-Year Fixed Jumbo | 6.78% | 6.8% | +0.11% | +0.09% |
| 5/6 Year ARM | 6.35% | 6.38% | +0.13% | +0.01% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.38% | 6.41% | +0.15% | -0.05% |
| 15-Year Fixed | 5.39% | 5.43% | +0.12% | -0.01% |
| 30-Year Fixed FHA | 5.56% | 6.77% | +0.15% | -0.05% |
| 30-Year Fixed VA | 5.8% | 5.94% | +0.15% | +0.03% |
| 5/6 Year ARM | 6.42% | 6.45% | +0.23% | +0.04% |
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.
Unless the government reopens, the only remaining economic report on this week's calendar is scheduled for tomorrow. It is the October Chicago Business Barometer, which is a type of purchasing managers' index from the Institute for Supply Management. This rarely affects mortgage rates.
