Mortgage rates are stuck again as the government plays catch-up on overdue economic data.
As of Thursday, the 30-year, fixed-rate mortgage averaged 6.26%, slightly higher than the previous week's 6.24% average, according to mortgage giant Freddie Mac. It was still lower than a year earlier, though.
The 15-year, fixed-rate mortgage showed a similar trend, averaging 5.54%, a slight increase from the previous week, but lower than at the same time last year.
Daily mortgage rates — typically more volatile — reflected a similar stagnation. Both the 30-year and 15-year fixed rates were unchanged on Thursday compared to a day earlier.
Overdue government data will likely sway market
There's a lot happening for the mortgage market right now. For one, the holidays are fast approaching, which typically creates a slowdown in the broader housing market as borrowers and buyers pull back and wait for the new year. Although there are some signs that this year could be a bit of an anomaly, the overarching opinion is that it will be a slow end to 2025 despite a recent uptick in existing home sales and borrower demand. In fact, the National Association of Realtors reported Thursday that existing home sales reached an eight-month high in October, and data from the Mortgage Bankers Association has consistently shown that borrower demand is far outpacing last year's trend.
"As we head into the winter holidays, modestly higher rates and rate volatility mean we should expect a traditionally slow seasonal housing market in November and December," Lisa Sturtevant, chief economist at Bright MLS, said in a statement Thursday.
More than that, though, there's the added chaos of the government's game of catch-up. For the seven weeks that the federal government was shuttered, no official data about the economy was released. Now, federal agencies are working to update those numbers. On Thursday, they released one of the most important updates as it pertains to mortgages: the jobs report.
Thursday's overdue data showed a mixed labor market. On the one hand, employers in the United States added more jobs in September than expected. Usually, that would be good news for the economy and bad news for mortgage rates.
But the story is more complicated than that this month. The September report also included revisions to data released in July and August. Those updates showed that in July, the U.S. added fewer jobs than originally reported, and in August, the market actually shed some 4,000 jobs. At the same time, September saw an increase in the unemployment rate — the highest since October 2021.
What does that all mean for borrowers?
In the short term, mortgage rates may remain pretty flat, if not slightly higher.
"Bottom line: If tomorrow morning's jobs data is much stronger than expected, rates would be quite a bit higher," Matthew Graham, chief operating officer of Mortgage News Daily, said in a blog post Wednesday, before the labor data was released. Graham noted that if the report was weaker, rates could stay "relatively unchanged." It seems like that's what happened on Thursday.
For some borrowers, the stagnation could be a good thing, according to Sam Khater, chief economist at Freddie Mac.
"This rate stability is a positive sign for both buyers and sellers, as it helps provide greater certainty in the housing market," he said in a statement Thursday.
Looking ahead, though, many economists have their sights set on the Federal Reserve's December meeting. Recall that the central bank cut its benchmark short-term interest rate in September and again in October. While a Fed rate cut doesn't directly translate to lower mortgage rates, it typically creates a ripple effect throughout the market that reaches mortgages.
The big question now is whether the Fed will lower interest rates in December, a decision that the job market data released Thursday will heavily influence. It's one of those things that unfortunately requires time before a clear answer can emerge. For now, mortgage rates are lower than they were this time last year, and that seems to be enough to motivate some borrowers to get off the sidelines and into the market as the holiday season approaches.