Mortgage rates fell slightly this week on new signals that the job market is weakening and the Federal Reserve will cut interest rates again next month.
The average 30-year mortgage rate was 6.23% through Tuesday, according to Freddie Mac data, down from 6.26% a week earlier. The average 15-year mortgage rate was 5.51%, down from 5.54%.
The 10-year Treasury yield, which mortgage rates closely track, has fallen as the odds of a December cut in the benchmark rate increase. 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 rate cut next month.
Consensus for a December rate cut is strengthening as new data suggests the labor market continues to weaken. This month, job losses among private employers have accelerated, according to data released Tuesday by payroll manager ADP.
Traders now see an 83% chance of a 25 basis point cut at the Dec. 9-10 Fed meeting, according to CME FedWatch. Although mortgage rates are not directly controlled by the Fed, they move based on expectations about future Fed interest rate policy.
Treasury yields and mortgage rates also fell Tuesday after Bloomberg News reported that White House National Economic Council Director Kevin Hassett, a close ally of President Trump and a proponent of lowering rates, is considered the likely favorite to succeed Jerome Powell as Fed chair.
Mortgage rates have hovered around year-to-date lows of between 6.2% and 6.3% for most of this fall, bringing some buyers back into the market. Contract signings jumped 1.9% in October from the previous month, according to new data from the National Association of Realtors. Applications to buy a home increased 8% through Friday compared to a week earlier, according to the Mortgage Bankers Association.
Claire Boston is a senior reporter for Yahoo Finance, covering housing, mortgages and homeowners insurance.
