Mortgage Rates did not Decrease as Expected this Week, Rates Rose
(October 11, 2024) — Mortgage rates rose again this week, with the 30-year fixed rate climbing to 6.52 percent, according to Bankrate’s latest lender survey. That rise is in spite of the Federal Reserve announcing a larger-than-expected rate cut last month, its first reduction since the pandemic.
“While rates dropped nicely in the two weeks before the Fed meeting, they have actually moved up since then,” says Melissa Cohn, regional vice president of William Raveis Mortgage. “I am spending a lot of time telling people that I expect rates to drop but not as quickly as they would like.”
Current mortgage rates
| Loan type | Current | 4 weeks ago | One year ago | 52-week average | 52-week low |
| 30-year | 6.52% | 6.31% | 7.75% | 7.03% | 6.20% |
| 15-year | 5.78% | 5.54% | 7.07% | 6.35% | 5.40% |
| 30-year jumbo | 6.59% | 6.52% | 7.64% | 7.06% | 6.36% |
The 30-year fixed mortgages in this week’s survey had an average of 0.33 discount and origination points. Discount points are a way to reduce your mortgage rate, while origination points are fees a lender charges to create, review, and process your loan.
“Following the release of a stronger-than-expected September jobs report, the 30-year fixed rate mortgage saw the largest one-week increase since April,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “However, we should remember that the rise in rates is largely due to shifts in expectations and not the underlying economy, which has been strong for most of the year. Although higher rates make affordability more challenging, it shows the economic strength that should continue to support the recovery of the housing market.”
This rate rise comes just three weeks after the Federal Reserve passed its long-awaited rate cut.
Even so, the housing market continues to show some signs of improvement—but “still-high home prices and elevated mortgage rates mean that further progress may be needed to grease the wheels,” says Realtor.com senior economic research analyst Hannah Jones in a recent analysis.
Monthly mortgage payment at today’s rates
The national median family income for 2024 is $97,800, according to the U.S. Department of Housing and Urban Development, and the median price of an existing home sold in August 2024 was $416,700, according to the National Association of Realtors. Based on a 20 percent down payment and a 6.52 percent mortgage rate, the monthly payment of $2,111 amounts to 26 percent of the typical family’s monthly income.
Where mortgage rates are headed
Fixed mortgage rates are not set directly by the Fed, but by investor appetite, particularly for 10-year Treasury bonds. The 30-year fixed-rate mortgage rate is often directly tied to the yield on a 10-year Treasury bond. When there’s uncertainty in the market, investors buy Treasury bonds, which drives yields (and mortgage rates) downward. This can lead to day-to-day rate swings as news comes in.
“While rates may continue to fall as the Fed provides more guidance on its future monetary policy, the majority of the adjustment in mortgage rates appears to have already been priced in,” says Ruben Gonzalez, chief economist at real estate brokerage Keller Williams.