Mortgage Interest Rates Forecast

Mortgage rates this week

Mortgage rates rose across the board in the week ending Oct. 10, with the average 30-year fixed-rate mortgage rate hitting its highest point since Aug. 1 — before the Fed cut benchmark interest rates.

• The 30-year fixed-rate mortgage averaged 6.4% APR, up 21 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 5.55% APR, up 33 basis points from the previous week's average.

• The 5-year adjustable-rate mortgage averaged 7.55% APR, up 14 basis points from the previous week's average.

This week’s mortgage rate bounce can be largely attributed to the latest jobs report, which the U.S. Bureau of Labor Statistics (BLS) released on Oct. 4. Job growth outpaced forecasters’ expectations, making a case for the relative health and strength of the economy.

Among other factors, one incentive for the Federal Reserve to continue cutting interest rates is to curb the unemployment rate. The BLS report supports the case that joblessness may not be an urgent economic concern, relieving some pressure on the Fed to further lower rates. In turn, lenders were a little more conservative with rate offers over the past few days.

Borrowers shouldn’t really worry about this becoming a trend. The Fed’s main reason for holding interest rates steady would be to suppress inflation, and the latest Consumer Price Index report (released Oct. 10) shows that inflation growth continued to shrink in September after central bankers made their first cut. Fed watchers are still predicting that another 25 basis point cut is coming in early November.