Homebuyers tour homes with a real estate agent.
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Fed Wednesday lower interest rates The third time in 2024. mortgage interest rate Increase.
The 30-year fixed-rate mortgage surged to 6.72% in the week ended Dec. 19, the day after the Fed meeting. according to Get Freddie Mac data through the Federal Reserve. This is up from 6.60% a week ago.
Intraday, the 30-year fixed-rate mortgage rate rose to 7.13% on Wednesday from 6.92% the previous day. Daily Mortgage News. It rose to 7.14% on Thursday.
Fed ‘spooked the bond market’
Melissa Cohn, regional vice president at William Raveis Mortgage in New York, said the Fed’s so-called “dot plot” this week showed fewer signs of further rate cuts in 2025.
Dot plotReflecting individual members’ expectations for interest rates, it shows officials expect the benchmark lending rate to fall to 3.9% by the end of 2025, equivalent to a target range of 3.75% to 4%. After the latest rate cut, the current 4.25%-4.5%.
When the Fed first cut interest rates in September, it expected four rate cuts of a quarter of a percentage point, or a full percentage point, in 2025.
“This combined with Trump’s desired policies of tariffs, immigration and tax cuts, all of which are inflationary, is spooking the bond market,” Cohen said.
LendingTree senior economist Jacob Channel said mortgage rates also tend to change in response to actions the Federal Reserve will take at its upcoming meeting.
For example, Mortgage rates fall This summer and early fall, it is expected that first interest rate cut As of March 2020.
So mortgage rates likely won’t do “anything particularly dramatic” heading into the actual Fed meeting, he said.
