Mortgage rates are seemingly stuck — again — as the economy continues playing catch-up with data missed during the government shutdown.
As of Thursday, the 30-year, fixed-rate mortgage had edged down slightly to 6.21%, according to mortgage giant Freddie Mac. That's down from 6.22% the previous week and 6.72% the same week a year earlier.
Similarly, the 15-year, fixed-rate mortgage declined to 5.47%, down from a week ago and the same time last year.
Daily mortgage rates — typically more volatile than weekly averages — exhibited a similar pattern. As of Thursday afternoon, both the 30-year and 15-year loans had moved down slightly compared to a day earlier and stood at just about the same cost as the average rates.
Big picture: It's a significant improvement from this time last year, "with rates down half a percent," according to Freddie Mac Chief Economist Sam Khater.
New inflation and labor market data could determine mortgage market's future
But Thursday's mortgage rate update follows a busy seven or so days that included a Federal Reserve meeting and data about both the labor market and inflation. In other words, there was a high risk for major mortgage volatility.
Indeed, some of that volatility translated into more sensitive daily measures of mortgage rates. Freddie Mac's, on the other hand, can take more time to show bumps because it's an average collected over time. That said, this week's average likely includes adjustments and reactions to last week's Fed meeting. Next week's average will more comprehensively reflect the economic data that came out this week.
While the recent meeting and data will certainly have a short-term effect on averages and daily mortgage rates, it might be more impactful in the long term, especially as the central bank makes policy decisions about short-term interest rates.
This morning's inflation data revealed that prices grew more slowly than expected. Meanwhile, Tuesday's jobs data showed a weakening labor market. That news came after the Fed reduced its benchmark interest rate last week and signaled that it would be pulling back on cuts.
The inflation and job market data released this week, however, could complicate that plan, according to Brad Case, chief residential economist for Homes.com.
Typically, this week's labor and inflation numbers would "increase the likelihood that the Fed will cut its policy rate again, perhaps as soon as its January meeting," Case said. "But if there's any improvement in inflation, it's not much, and if there's any deterioration in the labor market, it's not much."
More than that, there's some hesitation to accept the latest data as an adequate picture of the market due to lags in reporting caused by the government shutdown. As the economics team at Wells Fargo put it on Thursday, take the inflation data "with the entire saltshaker."
Long story short: There likely aren't any major changes in the near future for mortgage rates.
Even so, many economists and experts maintain their forecasts that next year will see average borrowing costs falling to the low 6% range — and staying there.
"Rates likely will be lower in the spring, and there will be more homes for sale, but buyers could face more competition," Lisa Sturtevant, chief economist at Bright MLS, said in a statement on Wednesday. "And the economy remains a wild card.
"If the labor market weakens further, some people may decide they cannot buy at all in 2026.”