Mortgage Rates Hit 11-Month Low After Fed Cut
Mortgage rates fell again last week, reaching their lowest level in nearly a year. The average 30-year fixed rate dropped to 6.26%, down from 6.35% the week before, according to Freddie Mac.
The decline followed the Fed’s quarter-point rate cut—its first since December 2024—bringing the federal funds rate to 4%–4.25%. While some had pushed for a sharper cut, policymakers opted for a cautious approach amid inflation and labor market concerns.
Lower rates have already boosted refinance activity, now making up nearly 60% of all mortgage applications. Still, with 81% of homeowners locked into mortgages under 6%, many are unlikely to sell, meaning the housing market may only see a modest pickup in sales.
Looking ahead, more Fed cuts are expected this year, with rates potentially easing into the low-6% to high-5% range if inflation stays in check. For now, homeowners refinancing are the biggest winners from the shift.
