The mortgage rates responded just performing opposite, the Federal Reserve reduction hit the benchmark interest rate this current week.
According to Mortgage News Daily, the average rate on the 30-year fixed mortgage has climbed up to 20 basis points after Chairman Jerome Powell declared in the conference headed by him that a possible reduction will be announced on Wednesday.
This was exactly held last time, when the Fed decreased its rate. The reason was that the bond was significantly priced in a cut, although they were not impressed by Powell’s commentary on rates.
However, the average rate on the 30-year fixed had slipped by 6.13 percent on Tuesday, following the most recent fall on September 16, the day before the announcement of the last cut by the Fed, making it a lesser in the year.
After the Fed’s statement about reducing rates this week, Powell responded to all the doubts on the reductions in a news conference. Meanwhile, the rate increased by 14 basis points on Wednesday and by 6 basis points on Thursday, to almost 6.33 percent, and 20 basis points higher than on Tuesday.
Previously, in September, the rate on the 30-year fixed mortgage recorded higher, to 6.37 percent.
In a client note, Chief Operating Officer of Mortgage News Daily, Matthew Graham, added that “The market’s enthusiasm for 3 Fed rate cuts in 2025 had grown a bit too large for the Fed’s liking. The market was nearly 100% certain of another cut in December. The Fed was not as certain, and Powell made it a point to say so yesterday. The result is a mild re-set in yields back to levels that are more consistent with a December cut being a solid possibility, but not a full lock.”
According to the Mortgage Bankers Association, the current fall in rates had damaged refinances, with approximately 111 percent last week on a year-over-year basis.
Thus, the lower rates did not move further for potential homebuyers.
