Mortgage rates hold at 6.37%, Fed decision eyed for December

"The trend of lower and less volatile mortgage rates has been a key storyline for the U.S. housing market in the second half of 2025. HousingWire Lead Analyst Logan Mohtashami noted this week that mortgage rates have settled at levels below 6.64% for the past four months. As long as rates don't spike back above 7%, we have a situation we can work with in 2026. Last year at this time, rates spiked, which caused that momentum to fade, Mohtashami wrote."

"Interest rate traders were becoming skeptical that the Federal Reserve would implement a third straight cut to the federal funds rate next month. According to the CME Group's FedWatch tool, the odds were evenly split at this time last week about whether policymakers would hold rates steady or approve a 25-bps cut. But on the back of another tepid jobs report for September in which the unemployment rate rose slightly, 83% of traders now think that benchmark rates will come down again in December."

"Fed governors Lisa Cook and Philip Jefferson offered public remarks in the past week that didn't include direct references to interest rate policies. But they did offer some clues into macroeconomic trends that are likely to shape thinking at the central bank. First and foremost among these trends is the rise of artificial intelligence (AI) and its growing influence on economic decisions."

Mortgage rates have settled below 6.64% for the past four months, providing favorable conditions for the U.S. housing market. Rates staying below 7% would support housing momentum into 2026. Trading odds shifted after a tepid September jobs report, leaving 83% of traders expecting federal funds rate cuts in December. The federal government shutdown delayed October CPI release and pushed November CPI publication to Dec. 18, after the Fed's Dec. 9–10 meeting. Fed governors Lisa Cook and Philip Jefferson highlighted macroeconomic trends, emphasizing that artificial intelligence is increasing worker productivity across multiple industries.

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