Mortgage Interest Rates Forecast
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Mortgage rates this week
Mortgage rates fell slightly in the week ending Dec. 12. This continues a downward trend that rates have followed since Thanksgiving.
The 30-year fixed-rate mortgage averaged 6.51% APR, down eight basis points from the previous week's average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.
The 15-year fixed-rate mortgage averaged 5.8% APR, down five basis points from the previous week's average.
The 5-year adjustable-rate mortgage averaged 7.27% APR, up two basis points from the previous week's average.
The latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics showed that inflation rose 2.7% in November, keeping in line with forecaster expectations. With that last piece of the economic puzzle in place, Federal Reserve watchers are virtually certain that a 25-basis-point cut is coming at the next meeting on Dec. 18. Home shoppers should remember, however, that mortgage rates often move in anticipation of what the Fed will do — not necessarily after the fact. Rates may continue to trickle downward over the next few days, but after next week, any movement will be in accordance with expectations for 2025.
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December mortgage rate forecast
Mortgage interest rates are likely to remain about the same in December, with the 30-year fixed-rate home loan staying between 6.75% and 7%.
Except for some volatility during the week after the election, mortgage rates were fairly steady in November, as economic indicators didn't pull any surprises. The inflation rate landed within expectations. The Federal Reserve steered the path it had mapped out. Nothing happened to push rates into an upward or downward path.
Look for December to repeat November's performance, featuring steady inflation indicators and an unsuspenseful Fed announcement on Dec. 18. As of late November, there was some uncertainty over what the Federal Reserve might do. Investors thought the central bank was a little more likely to cut the federal funds rate by a quarter of a percentage point than to keep it unchanged. That uncertainty has been dispelled in the first half of December.
