Mortgage Interest Rates Forecast
Mortgage rates fell this week amid signs of a cooling job market and ongoing government shutdown.
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Mortgage rates dropped for the third straight week, thanks in part to signs that businesses are pulling back on hiring. The average 30-year fixed mortgage fell to 6.11% APR, down from 6.35% just a few weeks ago.
Rates have been pushed and pulled all year by inflation and a shaky labor market, but recent comments from Fed officials suggest that slowing job growth could lead to future rate cuts — a signal markets are clearly watching.
While the Fed doesn’t directly set mortgage rates, its actions influence them — and more cuts to the federal funds rate could keep mortgage rates drifting downward. That’s good news for buyers and refinancers, though affordability remains tough. Still, buyers may benefit from longer listing times and more negotiating room, and anyone with a mortgage above 7% might consider refinancing. Even a half-point drop in your rate could add up to meaningful savings over time.
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. 16, markets were registering a 100% 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, despite what markets may predict, those cuts are not yet a sure thing.