"Mortgage rates dropped to their lowest level in more than a year as the Federal Reserve cut short-term interest rates this week. The rate decline offers a refinancing opportunity for some homeowners. The average rate on a 30-year fixed-rate mortgage fell five basis points to 6.01% APR in the week ending Oct. 30, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point."
"In recent months, the central bank has U-turned from inflation-fighting mode to unemployment-fighting mode. The Fed reduced the overnight federal funds rate Oct. 29, after also cutting the rate in September. Each reduction was a quarter of a percentage point. Investors predicted those rate cuts were coming, so in the lead up to each meeting, mortgage rates barreled downhill and beat the Fed at the bottom."
"This week's average rate was the lowest since the week of Sept. 19, 2024, when it averaged 5.89%. More importantly, current rates are substantially lower than in several periods over the past two years. Borrowers with mortgages from those eras might benefit from refinancing to a lower interest rate. Plenty of people have bought homes at higher-than-comfortable mortgage rates in the last few years, intending to refinance into lower rates eventually."
Mortgage rates fell to their lowest level in more than a year following Federal Reserve cuts to short-term interest rates. The average 30-year fixed-rate mortgage declined five basis points to 6.01% APR for the week ending Oct. 30, the lowest since Sept. 19, 2024. The Fed reduced the overnight federal funds rate on Oct. 29 and had cut it in September, each move trimming a quarter percentage point. Anticipation of those rate cuts pushed mortgage rates down ahead of the meetings. The 30-year rate has dropped over a percentage point since May, opening refinancing opportunities for borrowers who previously faced rates above 7%.
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