Mortgage Rates Rise After Fed Cut | Today, Dec. 19, 2024

Today’s mortgage rates

Despite yesterday’s cut by the Federal Reserve, the average 30-year fixed rate mortgage rose this morning.

Most of today’s economic indicators, including the Treasury yields, point toward upward pressure on interest rates.

Current mortgage and refinance rates

>Related: 7 Tips to get the best refinance rate

30-year fixed rate mortgage

At the time this was published, the average 30-year fixed mortgage rate reached 6.84%.

The average 30-year fixed rate mortgage (FRM) hit a record weekly low of 2.65% on Jan. 7, 2021, and a record weekly high of 8.89% on Dec. 16, 1994, according to Freddie Mac.

A 30-year FRM gives borrowers an affordable option but you pay more interest over the life of the loan compared to shorter mortgages.

15-year fixed rate mortgage

Today, the average 15-year fixed mortgage rate went to 6.12%.

The average 15-year FRM hit a record weekly low of 2.1% on July 29, 2021, and a record weekly high of 18.63% on Sep. 10, 1981, according to Freddie Mac.

The 15-year FRM offers borrowers a briefer term with less accrued interest, but the monthly payments will be much higher.

5/1 adjustable-rate mortgage

This morning’s 5/1 adjustable rate mortgage averaged 6.22%.

Adjustable-rate mortgages (ARMs) typically have lower initial interest rates compared to fixed loans. Once that initial period ends, the interest rate adjusts to the current market conditions. In this case, the intial period is five years and the adjustments are up to once every year. Homeowners with shorter term lending plans tend to see these as advantageous.

Market data affecting today’s mortgage rates

Here’s a snapshot of the state of play as this article was published. The data mostly compares to roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:

• The yield on 10-year Treasury notes increased to 4.554% from 4.402%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
• Major stock indexes mostly posted gains this morning. (Bad for mortgage rates.) When investors buy shares, they often sell bonds, pushing those prices down and increasing yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
• Oil prices decreased to $70.16 from $70.58 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices decreased to $2,610 from $2,654 an ounce. (Bad for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
• CNN Business Fear & Greed index — decreased to 30 from 51 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones

*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.

Caveats about markets and rates

Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.

So, use markets only as a rough guide. Because they have to be exceptionally strong or weak for us to rely on them. But, with that caveat, mortgage rates today might nudge upward or barely budge. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.

What’s driving mortgage rates today?

This week

Yesterday’s Federal Reserve meeting resulted in a 25-basis point rate cut, as many anticipated, which should help mortgage rates dissipate.

A handful of economic reports came out this morning. The week’s initial job claims fell to 220,000 from 242,000 last week and the 230,000 market expectation. The U.S. GDP was upwardly revised to 3.1% from 2.8% in the third quarter.

Existing home sales grew 4.8% in November to a seasonally adjusted rate of 4.15 million. That went above the market expectations of 4.1 million and October’s 3.96 million. Lastly, the U.S. leading economic indicators index rose 0.3% in November, up from the -0.1% median forecast and -0.4% in October.

“A rebound in building permits, continued support from equities, improvement in average hours worked in manufacturing, and fewer initial unemployment claims boosted the LEI in November,” said Justyna Zabinska-La Monica, senior manager at The Conference Board.

Though their influences typically aren’t heavy, all four reports will add upward pressure on mortgage rates.

Recent trends

Freddie Mac’s Dec. 19 report put the weekly 30-year fixed mortgage rate average at 6.72%, up 12 basis points from the previous week. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures. Still, they’re a good way to track trends.

Expert forecasts for mortgage rates

Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their rate forecasts for the last quarter of 2024 and the first three quarters of 2025 (Q4/24, Q1/25, Q2/25, and Q3/25).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Oct. 10 and the MBA’s on Oct. 27.

In its Mortgage Market Outlook, published Oct. 18, Freddie Mac wrote, “we expect [the economy] to continue to grow, though at a slower pace. Under our baseline scenario, we expect inflation to continue to trend lower. The Federal Reserve cut the federal funds rate by 0.5 percentage points in September and indicated further cuts of almost one percentage point in 2024 and another percentage point in 2025.”

Of course, given so many unknowables, these forecasts might be even more speculative than usual. And their past record for accuracy — due to the volatile nature of interest rates — hasn’t been wildly impressive.

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.

Current mortgage rates methodology

We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.

Today’s mortgage rates FAQ