Mortgage Interest Rates Forecast

Mortgage rates ticked lower this week, with the average 30-year fixed falling to 6.33% APR, according to rates provided to NerdWallet by Zillow.

That’s a slight move lower, but what really stands out is the uncertainty ahead. With the federal government now shut down, markets and lenders are flying without some of their most important instruments — namely, the economic reports that typically guide rate forecasts. The jobs report, for instance, won’t be released while the Bureau of Labor Statistics remains closed, leaving the Fed, lenders, and borrowers without key insights.

This cloudiness comes at a tricky moment. Fall is shaping up as an unexpectedly favorable season for buyers: pending sales are rising, and mortgage rates remain near the lowest levels seen all year. Still, a prolonged shutdown could make it harder to gauge the economy’s health and the Fed’s next steps. For cautious buyers, waiting may feel wise. But for those confident in their finances, October could offer a timely opportunity to lock in a still-low rate.

» MORE: Is it a good time to buy a house? Here's what to consider.

October Mortgage Rates Forecast

Financial markets seem confident that the Federal Reserve will reduce the federal funds rate at the end of its scheduled Oct. 28-29 meeting. On Oct. 2, the markets were registering close to a 99% chance of a rate cut, according to the CME FedWatch.

Mortgage rates are likely to slip lower as investors gain confidence that the Fed will reduce short-term rates once or twice before the end of the year. However, those cuts are not yet a sure thing.