Mortgage rates fell slightly this week amid new signs that the labor market is weakening and that the Federal Reserve will cut interest rates again next month.
The average 30-year mortgage rate was 6.23% as of Tuesday, down from 6.26% a week earlier, according to Freddie Mac data. The average 15-year mortgage rate was 5.51%, up from 5.54%.
The 10-year Treasury yield, which mortgage rates closely track, is falling as the likelihood of a benchmark rate cut in December grows. In recent days, New York Fed President John Williams, San Francisco Federal Reserve President Mary Daly and Federal Reserve Governor Christopher Waller have all indicated in interviews or speeches that they would support a cut next month.
learn more: How does the 10-year Treasury affect mortgage rates
Consensus is growing about a rate cut in December as new data shows the labor market continues to weaken. According to data released Tuesday by payroll processor ADP, private employers’ job losses declined sharply this month.
According to CME FedWatch, traders now see an 83% chance of a 25 basis point rate cut at the Fed’s Dec. 9-10 meeting. Although mortgage rates are not directly controlled by the Fed, they move based on expectations about future Fed interest rate policy.
“Another cut could push mortgage rates closer to 2025-lows as the year ends,” Jake Krimmel, senior economist at Realtor.com, said in a statement.
“This will give homebuyers something to be grateful for going forward in 2026, while potentially boosting a housing market that has seen some mild declines recently,” he said.
Treasury yields and mortgage rates also declined Tuesday after Bloomberg News reported that White House National Economic Council Director Kevin Hassett, a close ally of President Trump and a supporter of low rates, is being viewed as Jerome Powell’s successor as Fed chairman.
Mortgage rates have been hovering around year-to-date lows of 6.2% to 6.3% for most of this fall, which has drawn some buyers back into the market. New data from the National Association of Realtors shows contract signings rose 1.9% in October compared with a month earlier. Applications to purchase homes rose 8% through Friday compared with a week earlier, according to the Mortgage Bankers Association.
Read more: 8 Strategies for Getting the Lowest Mortgage Rates Right Now
claire boston is a senior reporter for Yahoo Finance covering housing, mortgages and home insurance.
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