{"id":22215,"date":"2025-10-26T14:48:02","date_gmt":"2025-10-26T14:48:02","guid":{"rendered":"https:\/\/finderica.com\/?p=22215"},"modified":"2025-10-26T14:48:02","modified_gmt":"2025-10-26T14:48:02","slug":"mortgage-rates-inch-toward-6-as-fed-weighs-october-cut","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=22215","title":{"rendered":"Mortgage Rates Inch Toward 6% as Fed Weighs October Cut"},"content":{"rendered":"
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Mortgage rates fell for the fourth consecutive week, finally nearing 6% for the first time since September 2024. <\/span><\/p>\n<\/div>\n

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Lenders and analysts have been anticipating that the Federal Reserve will announce another quarter-point cut to the federal funds rate at their Oct. 28-29 meeting. Central bankers will make their decision with limited information, as official data like the September jobs report haven\u2019t been released amid the ongoing government shutdown. <\/span><\/p>\n<\/div>\n

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The average 30-year fixed <\/span>mortgage rate<\/span> fell four basis points to 6.04% APR in the week ending Oct. 23, according to rates provided to SS by Zillow. A basis point is one one-hundredth of a percentage point.<\/span><\/p>\n<\/div>\n

Some central bankers favor another rate cut<\/span><\/h2>\n
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Fed Governor Christopher Waller said he supports further cuts to the <\/span>federal funds rate<\/span> while speaking at the Council on Foreign Relations in New York last week. He acknowledged that with economic activity and unemployment both on the rise, the Fed will need to move with caution. <\/span><\/p>\n<\/div>\n

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Susan M. Collins, a fellow member of the Federal Open Market Committee and president and CEO of the Federal Reserve Bank of Boston, indicated that she was also in favor of lowering rates in remarks to the Greater Boston Chamber of Commerce on Oct. 14. She characterized inflation risks as \u201csomewhat more contained,\u201d with unemployment posing the larger risk to overall economic health. <\/span><\/p>\n<\/div>\n

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Collins\u2019 position on inflation was strengthened by the latest Consumer Price Index, one of the very few economic indicators we\u2019ve gotten during the government shutdown. Released on Oct. 24, it showed <\/span>inflation<\/span> at 3% over the past 12 months \u2014 slightly below economists\u2019 expectations. <\/span><\/p>\n<\/div>\n

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While the Fed needs to consider both inflation and employment, Waller said labor will likely be \u201cthe more salient factor\u201d for monetary policy decision-making. That is to say, cutting rates could cause inflation to rise a little more, but the Fed may be willing to take that risk in order to curb worrying unemployment numbers. <\/span><\/p>\n<\/div>\n

The problem with recent economic activity reports <\/span><\/h2>\n
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One argument against cutting rates is that rising inflation could adversely affect consumer spending, which has been strong according to the latest available data. But reports pointing to a robust economy might not be capturing the full picture. The <\/span>unemployment rate<\/span> is measured across economic classes, while current spending levels are disproportionately held up by the wealthiest consumers. <\/span><\/p>\n<\/div>\n

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\u201cThe U.S. economy is being largely powered by the well-to-do,\u201d wrote Moody\u2019s Analytics Chief Economist Mark Zandi on X during the Fed\u2019s meeting last month. According to Zandi, spending among the top 20% of households by income increased during the second quarter of 2025, while spending among the bottom 80% of U.S. households has mostly just matched the pace of inflation since the pandemic. <\/span><\/p>\n<\/div>\n

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Waller also mentioned this idea in his Oct. 16 speech, underscoring the outsized influence that top earners have on consumption data while remaining \u201cfairly unaffected by higher prices, higher unemployment, or a slower economy.\u201d<\/span><\/p>\n<\/div>\n

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This dichotomy is apparent in the housing market, too, even as existing home sales grew 4.1% year-over-year in September. National Association of Realtors Chief Economist Lawrence Yun broke down home sales by price category in his call following the release of the September Existing Home Sales Report. \u201cIt\u2019s the upper end that\u2019s moving,\u201d Yun said. <\/span><\/p>\n<\/div>\n

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Sales of homes over $1 million increased by 20% year over year, he said, while sales of homes priced between $250,000 and $500,000 \u2014 where the typical American home falls \u2014 grew half as quickly at 10%. <\/span><\/p>\n<\/div>\n

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