BREAKING: Mortgage rates slipped again this morning, and they are now hovering near their lowest levels of the year. My checks across major lenders show the 30 year fixed averaging between 6.12 percent and 6.19 percent, with 15 year loans near 5.5 percent. That small move is catching buyers and refinancers off guard, in a good way.
Rates are bending lower, and the Bond Market is leading
The pullback ties directly to the bond market. The 10 year Treasury yield has eased to about 4.1 percent. Mortgage rates tend to track that yield, with a spread that reflects credit risk and lender margins.
Futures markets now imply an 86 to 87 percent chance that the Federal Reserve cuts its policy rate at the December 9 to 10 meeting. Traders are pulling yields down ahead of that decision. Lenders are following with modest price cuts on rate sheets.
- 30 year fixed: 6.12 percent to 6.19 percent today
- 15 year fixed: 5.4 percent to 5.6 percent
- 10 year Treasury: near 4.1 percent
Even so, rates remain well above the rock bottom levels of recent years. If home prices stay high, affordability will remain tight. That is the line buyers must navigate right now.
What the move means in dollars
A few basis points do not sound like much. On a house, they are real money.
On a 400,000 dollar loan at 6.19 percent on a 30 year term, principal and interest land near 2,450 dollars per month. At 6.75 percent, that payment is about 2,595 dollars. That is a savings of roughly 145 dollars each month, or about 1,700 dollars a year.
For a 15 year loan near 5.5 percent, the payment is higher, but the lifetime interest cost is far lower. That trade off can make sense for borrowers with strong cash flow or large equity.
Ask your lender about a float down option. If you lock today and rates improve before closing, you may capture a lower rate.
Why the next 72 hours matter
This drop has a clear driver, expectations for easier Fed policy. If the Fed cuts, and the statement sounds comfortable on inflation, yields can fall more. Mortgage rates would likely grind lower.
If the Fed surprises with a hold, or sounds hawkish, yields can snap higher. Rate locks could get more expensive, fast.
Two other data points can swing the tape. Any hot inflation print, or a sharp rebound in job growth, would push yields up. A softer tone in those reports would support today’s trend.
Mortgage pricing can gap around Fed day. A quote at 10 a.m. can be gone by 2 p.m. Moves like this favor prepared borrowers.
Should you lock or wait
Here is how I am framing it with buyers and refinancers today.
- Closing within 30 days, bias to lock, with a float down if available.
- Closing in 45 to 60 days, consider a partial lock or a rate cap, since lender pipelines can reprice quickly after the Fed.
- Flexible timeline, shop lenders now to secure credit approval, then wait for the Fed statement before locking.
Refinancers with loans at 7 percent or higher have a clearer case. Even at today’s levels, the monthly savings can justify fees in a reasonable break even period. For recent buyers with rates near 6.5 percent, the math is tighter. Run the numbers first.
Investor angle, where the opportunity sits
This move is all about spreads and carry. If the Fed cuts and the curve steepens a bit, mortgage backed securities can gain, especially if prepayment risk stays contained. Homebuilder shares tend to respond to lower mortgage rates, but margins depend on incentives and input costs. Watch order trends and cancellation rates.
For income investors, agency mortgage REITs benefit from lower funding costs if short rates fall, but book values are sensitive to spread volatility. Patience is key. A measured decline in rates, not a sudden plunge, is the sweet spot for spreads and book value stability.
Affordability is still the binding constraint. Rate relief helps, but high prices and limited supply are the bigger force on sales volume.
Frequently Asked Questions
Q: How low can mortgage rates go if the Fed cuts?
A: If the Fed cuts and the tone is dovish, the 30 year could test the high fives. That would likely require softer inflation and tame wage growth over several weeks.
Q: Are adjustable rate mortgages more attractive now?
A: ARMs can price lower than fixed loans in the short term. They carry reset risk. If you plan to move within five to seven years, they can work. Fixed loans offer more safety in a shifting economy.
Q: Will lower rates fix housing affordability?
A: Not by themselves. Small rate drops help monthly payments, but high prices and insurance costs still strain budgets. Supply needs to improve for lasting relief.
Q: Is it a good time to refinance?
A: If your current rate is 6.75 percent or higher, check your break even. Today’s quotes can deliver meaningful savings, especially on larger balances.
Conclusion
Mortgage rates are drifting toward year lows as bond yields slip and markets lean toward a December Fed cut. The window is open, but it is not guaranteed to stay open. If you are in the market, get your documents ready, price multiple lenders, and be ready to lock when the numbers line up.
