Mortgage Rates Ease to 7.38% Before Likely Fed Pause
FHA borrowing costs rose slightly, while jumbo rates moved lower as traders increasingly expected no Fed change.
The average 30-year conforming mortgage rate fell to 7.38% Tuesday, marking its third consecutive weekly decline. That is 14 basis points below the prior week and 25 basis points under the mid-October high. FHA loans moved up to 7.24%, while jumbo mortgages decreased to 7.69%.
Borrowing costs remain high enough to weigh on housing demand. Mortgage applications declined for a seventh straight week, and purchase activity was 18% below last year’s level. Higher financing costs and other affordability pressures have also hurt home sales and mortgage production during 2026, with industry forecasts calling for more difficult conditions in 2027.
Markets increasingly expect the Federal Reserve to leave its benchmark rate unchanged at its upcoming meeting. The CME FedWatch reading showed a 90.6% chance of no move Tuesday, up from 84.5% a week earlier and 35.8% a month earlier. Still, hotter inflation, higher oil prices and weaker economic data are pulling policymakers in different directions. A pause would not necessarily bring quick mortgage relief, and another increase remains possible in December. Recent housing actions from the Trump administration include a future mortgage-insurance pilot, manufactured-housing task force and lower-rate directives for certain USDA and VA loans.
Why it matters: High borrowing costs continue to delay discretionary moves, while buyers facing jobs or family changes may still proceed despite reduced affordability.
- HousingWire