The average 30-year fixed rate mortgage is 6.25% today, an increase of 0.04% since yesterday. The 15-year fixed mortgage rate stands at 5.25%, up by 0.05%. The 30-year FHA mortgage now averages 5.54%, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate is 6.66%, reflecting an increase of 0.09%.
The bigger picture
Why didn't yesterday's warmer-than-expected consumer price index (CPI) send mortgage rates higher? After all, when inflation is building, those rates typically climb.
Barron's suggested a reason: "Inflation continued to tick up in August, though not enough to thwart markets’ expectations that the Federal Reserve will lower interest rates next week in response to a weakening job market," it said.
But it's not all plain sailing from now on, with some analysts concerned that warm inflation will force the Fed to make fewer cuts later in the year than investors currently anticipate.
"'If that [CPI] trend continues, you have an inflation problem' — and that could prevent the Fed from cutting rates as deeply as Wall Street expects," Amar Reganti, a fixed-income strategist at Hartford Funds, told MarketWatch.
The Fed
We discussed yesterday the role the Fed may or may not play in mortgage rates. Click that link if you missed it.
Suffice to say, the Fed doesn't fix mortgage rates, but its policy for general rates probably influences them. It remains highly likely that the central bank will cut general interest rates next Wednesday, September 17.
Yesterday, we reported that the CME FedWatch tool put the odds of a quarter-point cut next Wednesday at 92% and a half-point one at 8%. The CPI changed that a bit, so, overnight, a quarter-point cut is now 93.9% likely, while a half-point one has odds of 6.1%.
The odds for cuts at the two remaining meetings of its rate-setting committee scheduled for later in 2025 have also receded a little, according to the tool.
Fed battle over inflation and employment
What cuts are actually delivered will be determined by economic data that's yet to be released. Further weakening in the labor market will likely put pressure on the Fed to make more cuts. However, more overheated inflation will probably mean fewer cuts.
How the Fed plays its cards if both those happen at the same time, which seems more than possible, is the crucial question for several months to come.
Yesterday afternoon, The Wall Street Journal further explained this tension: "Investors widely expected a September rate cut after last week’s lackluster August jobs report, and Thursday’s inflation reading will keep that solidly on track," it said. "But it doesn’t neatly answer questions over how aggressively officials will continue to reduce rates without more evidence of weakness in the labor market ..."
"Thursday’s reports [the CPI and weekly unemployment data] underscore worries that private-sector and Fed economists have harbored since the beginning of the year over how sweeping trade policy changes could weaken the economy while pushing up prices, delivering a whiff of stagflation," the Journal continued. "The inflation report showed that the economy might be avoiding a feared 'surge' of bigger price hikes as wholesalers and retailers instead spread out cost increases over a longer time horizon."
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.25% | 6.28% | +0.04% | -0.21% |
| 15-Year Fixed | 5.25% | 5.3% | +0.05% | -0.18% |
| 30-Year Fixed FHA | 5.54% | 6.75% | +0% | -0.22% |
| 30-Year Fixed VA | 5.66% | 5.81% | +0.04% | -0.18% |
| 30-Year Fixed USDA | 5.54% | 5.68% | +-0% | -0.18% |
| 30-Year Fixed Jumbo | 6.66% | 6.68% | +0.09% | -0.02% |
| 5/6 Year ARM | 6.36% | 6.39% | +0.09% | -0.19% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.35% | 6.38% | +0.04% | -0.21% |
| 15-Year Fixed | 5.24% | 5.28% | +0.03% | -0.2% |
| 30-Year Fixed FHA | 5.49% | 6.71% | +0% | -0.24% |
| 30-Year Fixed VA | 5.68% | 5.81% | +0.03% | -0.19% |
| 5/6 Year ARM | 6.37% | 6.4% | +0.1% | -0.22% |
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 tariffs and deficit funding are especially influential at the moment.
Mortgage rates today
The MarketWatch economic calendar shows just a single economic report due today.
That's a preliminary reading of September's consumer sentiment index. Markets expect it to inch lower: to 58.1 from August's 58.2.
A higher-than-expected number tends to push mortgage rates upward, while a lower-than-expected one might drag them downward. As-forecast figures may leave those rates virtually unchanged.
Today's report isn't one of those that frequently move mortgage rates. But consumer sentiment drives consumer expenditures, and those make up a huge chunk of America's gross domestic product. So, it could create some limited movement.
Next week brings retail sales data and the Fed's next rate announcement. So, there's still some excitement to come.
