Weekly Mortgage Rate Update- 11-4-2025
I Still Haven’t Found What I’m Looking For
It’s old news by now, but the Fed did cut the Fed Funds rate on Wednesday by .25% as expected. Mortgage rates moved up after Powell made a deliberate effort to lower the expectations for further cuts at the press conference following the meeting, saying a December cut is “not to be seen as a foregone conclusion. In fact, far from it.”
He pointed to a lack of data to go on given the government shutdown and the growing division among the other Fed members on what the appropriate path would be. The Fed aims to not surprise markets at their meetings. They telegraph far in advance what their plans are- so his specific remarks regarding December were meant to walk back expectations on rate cuts. Mortgage rates are always forward-looking and moved up some on the news.
The Fed also announced they would stop quantitative tightening on December 1 to support some liquidity concerns in the repo markets. So now, instead of maturing bonds going back into the market to be absorbed, they will roll these funds into Treasury bills.
This does reduce bond supply hitting the market, but it doesn’t help so much with mortgage rates because the reinvestment is going into debts of one year or less maturity. If they were investing these into longer term Treasury or mortgage bonds, it would have been a boost for mortgage rates. That doesn’t seem to be the case for now.
A Watched Pot Never Boils
Despite all the news each week, mortgage rates have been range bound since the beginning of September. Today we are back to quoting slightly higher rates after two weeks of quoting slightly lower rates. The range is only a difference of about .375% on the rates we’ve quoted over the past 2 months.
Every time we try to break out of this range we fail. We also tested this level in September 2024. The headlines and focus on rates make it seem more volatile than it is. The concern over volatility keeps consumers on hold, they are waiting for a big move in rates. We need to adjust the messaging here. Today rates are almost 1% lower than this time last year and are at close to the lowest levels since 2023.
What’s Ahead
After Wednesday, this will officially be the longest government shut down in history. Mortgage rates will be driven primarily by news on this and geopolitical developments in the absence of our usual economic data.
This would typically be jobs week, but now this will be the second month in a row with no government jobs data. We will get the private sector report from ADP, which will get more weight than usual since it’s all we have to go on.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.