Mortgage Rates in the U.S. Rise for the First Time in Four Weeks

Mortgage rates in the U.S. rose this week, marking the first increase in four weeks. The average rate for a 30-year fixed loan reached 6.72%. This rise follows a previous rate of 6.6%. Freddie Mac reported the change on Thursday.

Federal Reserve Cuts Benchmark Rate Again

The Federal Reserve lowered its benchmark rate for the third time since mid-September. Despite this, officials signaled a more cautious approach moving forward. Projections now show only two rate cuts in 2025, a revision from earlier forecasts. Federal Reserve Chair Jerome Powell emphasized the need for further progress on inflation, which remains above the central bank’s target.

Experts Predict Volatile Mortgage Rates Ahead

Kara Ng, senior economist at Zillow Home Loans, noted that the current rate cut may be the last “relatively easy” adjustment. “Looking ahead, the Fed and markets are likely to respond to incoming economic data and policy changes,” Ng said. She also cautioned homebuyers to expect continued volatility in mortgage rates and advised them to be ready to act when the right opportunity arises.

Surge in Home Sales Driven by Lower Rates in September

Sales of previously owned homes surged last month, reaching the highest pace since March. This surge in activity aligns with data from the National Association of Realtors, showing a notable increase in completed home purchases, many likely contracted in September when mortgage rates dropped to a two-year low.

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Late September Rate Drop Fueling Urgency

Danielle Hale, chief economist for Realtor.com, pointed out that the drop in mortgage rates “attracted buyers to the market,” while the subsequent rate spike in late September likely created a sense of urgency that contributed to the surge in sales.

Current Rates in Line with 2023 Levels

According to Freddie Mac’s chief economist Sam Khater, mortgage rates this week are comparable to those observed in the same period last year. “Mortgage rates have generally fluctuated between 6% and 7% over the past 12 months,” Khater explained. “Homebuyers are gradually adjusting to these higher rates and are increasingly willing to proceed with purchasing a home.