Will mortgage rates fall without a February Fed meeting? Experts weigh in
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TL;DR
- Mortgage rates have reached their lowest point in over three years, hovering just above 6% for 30-year fixed-rate mortgages.
- Factors influencing this decline include a $200 billion mortgage-backed securities (MBS) purchase and previous Federal Reserve rate cuts.
- Experts believe mortgage rates can still fall in February even without a Fed meeting, as they are influenced by market expectations of inflation and employment.
- Key economic indicators like Core CPI inflation (currently 2.6%) and unemployment (currently 4.4%) can impact investor behavior in the bond market, potentially driving mortgage rates lower.
- The 10-year Treasury yield is a good indicator to track, as mortgage rates typically follow its movement.
- Administration mandates, such as MBS purchases, can also influence mortgage rates.
- Most experts predict modest movement in mortgage rates for February, with potential for a gradual dip if inflation trends lower, rather than a sharp drop.
- Predictions for February range from hovering around 6% to between 6% and 6.375%, with a greater chance of rates moving higher than much lower if inflation fears arise.
- The Mortgage Bankers Association predicts the average 30-year mortgage rate to end the first quarter of 2026 at 6.4%, while Fannie Mae projects 6.1%.
- Experts advise potential homebuyers to run the numbers and act when rates and payments fit their budget, especially with demand likely to rise during the spring homebuying season.