US mortgage rates edged lower on Wednesday, with the average 30-year fixed rate at 7.12% and the 15-year fixed at 6.52%, according to live rate data compiled by Ask ROB from Bankrate and Federal Reserve sources. The 30-year rate has slipped 0.08 percentage points this week, easing from the 7.18% level reported on Tuesday, though it remains above 7% and far above the lows borrowers enjoyed earlier in the decade.
The small dip offers little comfort to buyers. Tuesday’s hot October CPI report, which showed prices rising 0.4% against a 0.3% forecast, has pushed traders to price a December Federal Reserve rate rise as a near certainty, and mortgage rates tend to follow Treasury yields rather than the Fed’s policy rate directly. Mortgage Professional America warned that rates are likely headed higher after the inflation data.
The December deadline
The Fed meets on December 8 and 9, and futures markets now put the chance of a hike at 100%, up from 84% before the CPI release, according to CME FedWatch. The open question is size: most traders expect 25 basis points, with a smaller group pricing 50. For buyers on the fence, the window to lock a rate before that meeting is narrowing fast.
What it costs in practice
At 7.12%, the monthly payment on a typical home loan is hundreds of dollars higher than it would have been at the sub-3% rates of 2021. Housing analysts say affordability will stay stretched until rates fall meaningfully or prices adjust. Anyone house-hunting this week should get a written lock quote, compare at least three lenders, and check whether the quoted rate includes discount points, which can flatter the headline number.
The pressure is not only American. The Bank of England raised its base rate from 3.75% to 4% on November 5, and the best UK two-year fixed mortgage is 4.78% from Halifax, while average UK fixed rates sit near 6%. Bank of America has warned of three Federal Reserve hikes before year-end, according to Mortgage Professional America, and Franklin Templeton strategist Jeff Schulze said the hot October core CPI print leaves a December hike ‘all but signed, sealed and delivered’ after Governor Waller’s hawkish remarks. Borrowers who can lock a rate before December 9 should weigh the cost of waiting against the risk that the Fed goes bigger than the expected quarter point.
Related reading: Mortgage Rates Ease to 7.18% as Borrowers Watch Tuesday CPI and Fed December Hike Odds: What a Hot or Cool CPI Means for Borrowers
