Mortgage rates remain stubbornly high even as the Federal Reserve prepares for another interest rate cut this week—a move that typically signals relief for borrowers. However, industry analysts caution that mortgage rates may not follow suit and could even tick higher depending on the tone of Fed Chair Jerome Powell’s policy guidance.

According to Mortgage News Daily, 30-year fixed mortgage rates averaged 6.36% on Monday, up 5 basis points from the previous week and hovering near their highest levels in three months. Similarly, HousingWire’s Mortgage Rates Center (MRC) reported Tuesday that 30-year conforming loans averaged 6.33%, a slight dip of 3 basis points from last week. FHA-backed 30-year loans eased by 1 basis point to 6.12%, while jumbo loans climbed 8 basis points to 6.27%.

Despite the Fed’s anticipated cut, mortgage rates remain largely influenced by broader market dynamics, including investor sentiment and Treasury yields. While spreads between mortgage rates and benchmark rates have narrowed, they remain historically wide, signaling persistent risk premiums in the market.

Affordability Outlook
Homebuyer affordability has seen modest improvement thanks to incremental rate declines earlier this quarter, but the current plateau in mortgage rates continues to challenge buyers. With housing inventory still tight and home prices elevated, even small rate fluctuations can significantly impact monthly payments.

What’s Next?
All eyes are on the Fed’s announcement this Wednesday. If Powell signals a cautious approach to future cuts or expresses concern about inflationary pressures, mortgage rates could remain sticky—or even rise slightly—despite the headline rate reduction.

For borrowers, this environment underscores the importance of timing and strategy. Locking in a rate now may be prudent for those concerned about potential volatility, while others may choose to wait for clearer signals from the Fed and the bond market.