:max_bytes(150000):strip_icc()/fizkes-27f63e53962647eda886683f60b461e3.jpg "Rates Fell … Or Rose? Why Mortgage Headlines Don’t Agree After the Fed’s Move")
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Key Takeaways
- Some headlines say mortgage rates dropped, but those reports reflect weekly averages of rates registered before the Fed’s latest meeting.
- In reality, daily mortgage averages rose yesterday—and are jumping even higher today.
- Mortgage rates don’t necessarily follow the Fed’s rate—they can rise even when the central bank makes a cut.
- Though the Fed lowered rates this week, uncertainty about further reductions has pushed 10-year Treasury yields higher, driving mortgage rates up.
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Why Some Headlines Said Mortgage Rates Were Falling
As homebuyers watched to see what the Federal Reserve’s expected rate cut would mean for mortgages, headlines over the past two days told conflicting stories—some suggesting rates were falling, others pointing higher.
On Wednesday, the Mortgage Bankers Association (MBA) reported that the average 30-year rate dropped 10 basis points from the prior week. Then today, Freddie Mac’s weekly survey showed a 9-basis-point decline.
But both measures are based on weekly averages, which smooth together five to seven days of data. As a result, the MBA and Freddie reports reflect mortgage rates registered before the Fed meeting, offering a lagging story of falling rates even though daily data were already moving the other way.
The Reality: Daily Rates Have Jumped Higher
Investopedia’s daily mortgage averages show that real-time rates are moving in the opposite direction. Our average 30-year rate rose 5 basis points after the Fed meeting yesterday, to 6.50%, and so far today, it’s surged another 13 points higher for a mid-day average of 6.63% at the time of this writing.
If you’ve been following Investopedia’s mortgage rate coverage, you know we capture each day’s moves as they happen. That means daily rate momentum registers every weekday morning—even if the weekly averages haven’t yet caught up.
Other daily trackers confirm the same pattern. Mortgage News Daily, for example, reported that its average 30-year rate climbed 9 basis points yesterday and another 15 points today.
Why the Fed’s Cut Doesn’t Guarantee Lower Mortgage Rates
It’s a common assumption: When the Federal Reserve cuts interest rates, mortgage rates fall. But that’s not how it works.
The Fed’s benchmark rate mainly influences short-term borrowing costs—think credit cards, personal loans, and bank deposit rates—rather than long-term loans like mortgages.
A 30-year fixed-rate mortgage, for example, is steered by broader forces, including inflation expectations, housing demand, and overall economic conditions. Most importantly, mortgage rates track the bond market—especially the 10-year Treasury yield, which plays a central role in determining lender costs.
That’s why mortgage rates often move independently of the Fed, and sometimes in the opposite direction. A clear example came late last year: Between September and December, the Fed cut rates by a full percentage point, yet by January the average 30-year mortgage rate had surged 1.25 percentage points above its September level.
That dynamic could be playing out again now, as questions about the Fed’s next moves weigh heavily on the bond market.
What’s Driving Today’s Mortgage Rate Surge
Mortgage rates track the 10-year Treasury yield more closely than the Fed’s short-term rate. That’s why yesterday’s quarter-point cut to the fed funds rate had little direct impact on mortgage costs. The key driver is what happens with longer-term yields.
Right now, those yields are rising, partly because the Fed faces a dilemma: Helping a softening job market calls for rate cuts, while fighting still-stubborn inflation argues for keeping rates high. Those competing pressures have policymakers waiting for more data before deciding how quickly—or even whether—to move again.
The Fed’s official “dot plot” forecast still suggests two more cuts are coming, but Federal Reserve Chairman Jerome Powell’s press conference made clear that’s far from guaranteed. Uncertainty like this tends to push 10-year Treasury yields higher, as investors demand more return for the risk of holding long-term bonds—and that rise feeds directly into higher mortgage rates.
So while mortgage rates are rising now, the path from here is far from certain.
Today’s Mortgage Rate News
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The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2025. Use is subject to the Zillow Terms of Use.
