Key Takeaways
- 30-year mortgage rates are hovering just slightly above a recent three-year low as the Fed heads into its next rate-setting meeting this week.
- The central bank is widely expected to hold rates steady, but mortgage rates depend on factors far beyond the Fed.
- Because future rates are unpredictable, buyers and homeowners are often better off acting when their finances and the right house line up.
Where Mortgage Rates Stand Ahead of This Week’s Fed Meeting
With the U.S. Federal Reserve (Fed) set to meet this week, many homebuyers and homeowners are watching mortgage rates closely, trying to gauge whether the Fed’s decision could affect the borrowing outlook. For now, mortgage rates are entering the week on relatively steady footing.
According to Freddie Mac, the average 30-year fixed mortgage rate fell to 6.09%—its lowest level in three years—in its weekly reading last Thursday. Since then, our daily tracking shows the 30-year average has inched up a minor 10 basis points, leaving mortgage rates still relatively low heading into this week’s Fed meeting.
Where rates go afterwards is an open question. While it’s widely expected the central bank will leave interest rates unchanged—and that a pause could stretch on for months—mortgage rates react not just to what the Fed does, but to a complex web of other factors.
Why This Matters
Mortgage rates are near a recent low ahead of the Fed’s meeting this week. But where mortgage rates go next will depend on more than a single decision—making timing the market more difficult than it looks.
Why Mortgage Rates Don’t Necessarily Track the Fed
It’s a common assumption: When the Federal Reserve moves interest rates, mortgage rates should follow. But that relationship is far less direct than many borrowers expect.
The Fed’s benchmark rate mainly influences short-term borrowing costs, such as credit cards, auto loans, and the interest banks pay on savings accounts. By contrast, 30-year mortgage rates are shaped by a wider mix of forces, including inflation expectations, investor demand, and the broader economic outlook.
Important
The single biggest driver of 30-year mortgage rates is the bond market, particularly the 10-year Treasury yield, which plays a major role in determining lenders’ funding costs and mortgage pricing.
That’s why mortgage rates can rise, fall, or barely move around a Fed decision—even moving in the opposite direction. In late 2024, for example, the Fed lowered rates by a full percentage point over the final months of the year, yet the average 30-year mortgage rate jumped almost 1.25 percentage points higher over the same period.
More recently, mortgage rates have also climbed in the days following individual Fed rate cuts, underscoring that markets often react more to expectations about future inflation and economic growth than to the Fed’s headline move itself.
Taken together, those dynamics help explain why mortgage rates can be difficult to predict around Fed meetings. Mortgage rates respond to an evolving mix of economic signals, not a single decision from policymakers.
What This Week’s Fed Meeting Means for Buyers and Homeowners
For homebuyers, the takeaway is familiar but still easy to overlook: Timing the mortgage market is extremely difficult. Rates can move for reasons that have little to do with the Fed, so waiting for a specific policy decision to deliver a better deal often doesn’t work out. If you find a home that fits your budget and long-term plans, moving forward when you’re financially ready is usually the more reliable strategy.
That’s especially true given the broader outlook for mortgage rates. Fannie Mae’s latest housing forecast projects that 30-year mortgage rates will change very little through 2026, dipping from 6.1% in the first quarter to 6.0% for the rest of the year. While some analysts expect a larger midyear dip, most don’t see it lasting.
In that kind of environment, holding out for a meaningfully lower rate can mean missing out—without much to show for the wait.
For existing homeowners, refinancing may still be worth considering if your current rate is in the high-7% or 8% range. The key question is whether today’s rates are low enough to justify the upfront costs. One way to assess that is by calculating your break-even point—how long it would take for your projected monthly savings to offset the refi closing fees you’ll incur. If that timeline stretches out for years and you expect to move before then, refinancing may not make sense.
Ultimately, mortgage rates don’t move very predictably, and they don’t respond to the Fed in a prescribed way. That’s why the most dependable approach—for buyers and homeowners alike—is to make decisions based on personal finances and housing needs, rather than trying to anticipate the Fed’s next move.