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Rome wasn’t built in a day, and the same can be said about the housing market’s recovery. Buyers still face obstacles, but the market is starting to change. In recent months, mortgage rates dropped to a two-year low due to falling inflation and the Fed’s September jumbo rate cut, before ticking back up again in October. As we turn the page to November, other factors could impact mortgage rates going forward.
For anyone thinking about buying a home or refinancing, the recent shifts raise an important question: Will mortgage interest rates fall in November? To help answer the question, it helps to take a look at both possibilities.
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Will mortgage interest rates fall this November?
Not sure what to expect for mortgage interest rates this November. There’s an argument to be made for both scenarios:
Yes, mortgage interest rates will fall in November
Despite the October uptick in mortgage rates, the average has dropped from 6.86% in July to its current rate of 6.57% as of October 29, 2024. However, some developments in November may cause home loan rates to reverse course.
Many experts expect the Federal Reserve to cut the federal funds rate at its early November meeting. The CME FedWatch Tool indicates a 98.4% probability that the Fed will lower the rate by 0.25%, or 25 basis points.
A federal funds rate cut and a 10-year treasuries sell-off could lead to a drop in mortgage rates, says Kevin Leibowitz, founder and mortgage broker at Grayton Mortgage. “I do think that rates will fall in November for two principal reasons. One, the sell-off in rates—the increase in rates (drop in price) of 10-year treasuries and mortgage-backed securities in sympathy—was overdone. The Fed has changed their posture from raising rates to stem inflation to lowering and maintaining rates. The 10-year treasury looks to be oversold, in my opinion, and we should see improvements as the month progresses. Two, the Fed will probably cut rates again.”
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No, mortgage rates will not fall in November
Of course, mortgage rates are as unpredictable as ever. Homebuyers and mortgage brokers alike hopeful the Fed’s substantial rate cut in September would lead to relief in the home loans market. Initially, mortgage rates dropped before climbing back up in October.
“Sadly, the only direction rates are currently trending is up, and there does not appear to be an end in sight,” says Sarah Alvarez, vice president of mortgage banking at William Raveis Mortgage. “Today, we saw a major rally in the bond market due to concerns that, regardless of which party wins, we will likely have to contend with a potentially inflationary impact of the election, especially when it comes to issuing new treasury debt. Combined with continued strong economic data and stubborn inflation, it may take longer than we had hoped to see meaningful and lasting relief in the rate market.”
Should you secure a mortgage or wait?
With mortgage rates seemingly in flux, should you take out a new mortgage or refinance now or is it better to wait?
“If you need to make a move, and owning is an option, then do it,” says Leibowitz. “Focus on the payment and not on the rate. Can I afford the payment? Does the housing expense—mortgage payment, real estate taxes and homeowner’s insurance—make sense versus what I could get by renting?”
Leibowitz also says those looking to refinance should do so if the numbers work. “I tell clients to not step over the dollars to pick up the pennies. If you can save a good chunk of money, then ink those savings. If rates improve some more, then we can refinance again.”
The bottom line
While your mortgage loan rate is an important factor when buying a home or refinancing, it’s not your only consideration. Additionally, predicting future mortgage rates is difficult for even the most experienced industry insiders.
As Jim Davis, a partner and senior wealth advisor at Aspen Wealth Management, points out, “The thing about the future is, well, it’s the future. It’s hard to say where rates are headed, even though there are signs they could stabilize or edge downward. Instead of trying to predict every move, I usually advise focusing on what you can control—having a solid strategy for managing debt and making sure your financial plan can adapt, no matter what rates do next.”
Have more questions? Learn more about your current mortgage rate options here.