Manyhoped mortgage rates would easedown to 6% after the Fed began slashing interest rates this fall.
Investors are anticipatinganother 0.25% rate reductionat the Fed’s Dec. 17 to 18 policy meeting.
Forprospective homebuyers, that means mortgage rates won’t drop below 6% for a while.
Essentially, key indicators – the inflation rate and labor market growth – signal how the economy is performing.
Those signals affect investor expectations and appetites, setting off a chain reaction in the bond market.
Also called mortgage-backed securities, mortgage bonds typically move in tandem with the 10-year Treasury.
When yields are lower, the value of the bond increases and mortgage rates decrease.
Thecurrent version, last updated in September, estimates four rate cuts in 2025.
Read more:Unemployment Statistics Are Misleading.
Economic Hardship Is Much Worse
Advice for homebuyers
The direction of mortgage rates isn’t permanent.
Next month’s data could paint a different story about the labor market and inflation risks.
