Last week, mortgage rates hit their lowest points in over three years. They’re still relatively low, but they’ve increased a little bit. The national average 30-year rate is now 6.09%, according to Freddie Mac. So, what does this mean for the 2026 housing market? Will mortgage rates go back down soon? Are mortgage rates dropping? Mortgage rates are dropping overall. They are near their lowest levels in more than three years, though they’ve ticked up since last week. As of January 22, Freddie Mac repor ...

Group 1: Mortgage Rate Trends - Mortgage rates have decreased for four consecutive weeks, with the current average for 30-year fixed-rate mortgages at 6.26% as of September 18, 2025, compared to 6.09% a year ago [1][2] - The Federal Reserve cut the federal funds rate by 25 basis points during its September 2025 meeting, marking the first cut of the year after three cuts in 2024 [3][4] - Mortgage rates typically mirror trends in the federal funds rate, but they do not always continue to decrease after a rate cut [4][5] Group 2: Housing Market Dynamics - The current housing market is characterized by a supply-demand imbalance, with buyers outnumbering available homes, particularly for first-time buyers [8] - The median sale price of single-family homes has risen from $208,400 in Q1 2009 to $410,800 by Q2 2025, indicating a long-term upward trend [9] - Even with potential interest rate drops during a recession, increased demand could keep home prices high due to limited supply [10] Group 3: Buyer Strategies - Buyers are advised not to wait for significantly lower mortgage rates, as home prices and supply-demand factors also play crucial roles in affordability [11] - Exploring various housing options, such as condos or fixer-uppers, can help buyers find affordable homes in today's market [14][17] - Financial tools like rate buydowns can make current mortgage rates more manageable, allowing buyers to reduce their interest rates upfront [19]

A certificate of deposit (CD) allows you to set aside your cash in an ultra-low-risk account while earning a guaranteed return for several months or years. Until recently, savers enjoyed the highest CD interest rates in nearly two decades. However, after the Federal Reserve began a series of cuts to the federal funds rate in 2024 and 2025, those sky-high rates have been on the decline. If you’re looking to grow your savings in 2026, you may be wondering if CD rates will hold steady, continue dropping, or ...

Group 1: Federal Reserve Rate Changes - The Federal Reserve cut its benchmark rate by 25 basis points in September, bringing the target range to 4%-4.25% [1] - This decision will lead to lower interest rates on credit cards, loans, and deposit products, benefiting borrowers but negatively impacting savers [1][5] - The Fed's rate cut is the first of the year, and interest rates remain high by historical standards, with caution indicated for future cuts due to stalled inflation trends [18] Group 2: Impacts of Interest Rate Changes - Lower federal funds rates encourage borrowing and spending among consumers and businesses, but reduce interest earnings for savers [5][12] - Higher interest rates can lead to more expensive new loans, impacting monthly payments and overall borrowing costs [7][16] - Conversely, higher rates can benefit savers through better savings rates and fixed-rate loans remain unaffected by rising rates [8][14] Group 3: Strategies for Current Interest Rate Environment - Opening a high-yield savings account is recommended to maximize returns on savings despite potential future rate cuts [18] - Locking in a high rate with a Certificate of Deposit (CD) can provide a stable return for a set period [19] - Minimizing debt is crucial in an environment of elevated inflation and interest rates to avoid financial strain [20]

Certificates of deposit (CDs) can be a great choice for savers since they often pay higher interest rates than traditional savings accounts. In recent years, financial institutions have offered remarkably high yields on CDs amid elevated interest rates, with some even paying over 5%. However, interest rates have started to fall, with a possibility of more rate cuts in the near future. As a result, it’s not as easy to get a 5% CD as it once was. While 5% CDs are tougher to find today, a handful still exist. ...

Many factors influence the interest rate you get on a mortgage loan, including your credit history and the size of your down payment. Average loan rates across the country also play a role — and those tend to rise and fall with inflation. The December Consumer Price Index (CPI), a key measure of inflation, was released on Tuesday, and the numbers weren’t bad — but were they strong enough to push down mortgage rates? Quick recap: What is inflation? Before understanding how inflation affects mortgage rat ...

Many factors influence the interest rate you get on a mortgage loan, including your credit history and the size of your down payment. Average loan rates across the country also play a role — and those tend to rise and fall with inflation. The November Consumer Price Index (CPI), a key measure of inflation, showed that inflation rose more slowly than expected. So, how will that affect home loan rates? Quick recap: What is inflation? Before understanding how inflation affects mortgage rates, it is essent ...

Core Insights - The Federal Reserve (the Fed) plays a crucial role in shaping U.S. monetary policy by setting interest rates, which influence savings and borrowing costs, including mortgage rates [1][4] - The Fed's adjustments to the federal funds rate indirectly affect mortgage rates through the yield on the 10-year Treasury note, which serves as a benchmark for borrowing costs [6][19] Group 1: Federal Reserve Functions - The Fed is likened to a farmer managing water (money and credit) to ensure economic growth and job creation [2][3] - The Fed adjusts the federal funds rate to control the flow of money; lowering the rate encourages spending, while raising it discourages spending to prevent inflation [4][8] Group 2: Interest Rate Dynamics - The federal funds rate was at a 23-year high since July 2023 but was lowered in late 2024, with cuts of 25 basis points in September and October [5] - As of late October 2025, the effective federal funds rate was 4.22%, with the 10-year Treasury yield at 4.01% and the average 30-year fixed mortgage rate at 6.19% [8] Group 3: Mortgage Rate Influences - Mortgage rates typically decrease when the Fed cuts interest rates, but current economic factors may complicate this relationship [10][11] - The 10-year Treasury yield and mortgage rates generally move in tandem with changes in the federal funds rate [9][19] Group 4: Borrower Considerations - Borrowers are advised to focus on controllable factors in the mortgage process, such as comparing lenders and interest rates [14] - Adjustable-rate mortgages may be beneficial for first-time buyers as interest rates are anticipated to decline [15][16] - Fixed-rate mortgages provide consistency, and borrowers should assess their personal financial situations before deciding on locking in rates [17][18]

Core Insights - The Federal Reserve (the Fed) is the central bank of the U.S. and plays a crucial role in shaping monetary policy, particularly through setting interest rates that influence savings and borrowing costs [1][4] - The Fed's adjustments to the federal funds rate indirectly affect mortgage rates by influencing the yield on the 10-year Treasury note, which serves as a benchmark for mortgage rates [7][19] Group 1: Federal Reserve's Role - The Fed acts as a regulator of the economy, akin to a farmer managing water supply, to ensure economic growth and job creation [2][3] - The federal funds rate is a benchmark interest rate that affects various financial products, including savings accounts and mortgage rates [4][19] - The Fed lowers the federal funds rate to stimulate spending during economic downturns and raises it to curb inflation when the economy is overheating [5][9] Group 2: Impact on Mortgage Rates - The 10-year Treasury yield is influenced by the federal funds rate and serves as a minimum expectation for borrowing costs, with mortgage rates typically being higher due to credit risk [8][19] - Historical data shows that as of early August 2024, the 10-year Treasury yield was 3.99% and the average 30-year fixed mortgage rate was 6.73%, reflecting the Fed's rate adjustments [9] - Mortgage rates generally decrease when the Fed cuts interest rates, but current economic conditions may complicate this relationship [11][12] Group 3: Borrower Considerations - Borrowers are advised to focus on controllable factors such as comparing mortgage lenders and interest rates rather than worrying about the Fed's actions [14] - Adjustable-rate mortgages may be beneficial for first-time buyers as interest rates are anticipated to decline [15][16] - Fixed-rate mortgages provide consistency, and borrowers should consider their personal financial situation when deciding whether to lock in a rate [17][18]

Core Insights - The Federal Reserve (the Fed) plays a crucial role in shaping U.S. monetary policy, primarily through setting the federal funds rate, which influences various financial products, including mortgage rates [1][4][20] - The Fed's adjustments to the federal funds rate aim to balance economic growth and inflation, akin to managing water flow for crops [3][5] Federal Reserve Functions - The Fed controls the flow of money and credit in the economy by setting the federal funds rate, which serves as a benchmark interest rate affecting multiple economic sectors [4][20] - A lower federal funds rate encourages spending by making borrowing cheaper, while a higher rate discourages spending to prevent inflation [5][9] Impact on Mortgage Rates - Although the Fed does not directly set mortgage rates, changes in the federal funds rate affect the yield on the 10-year Treasury note, which in turn influences mortgage rates [6][10] - Historical data shows that as the federal funds rate increased, the 10-year Treasury yield and average 30-year fixed mortgage rates also rose, indicating a correlation between these rates [9][10] Recent Trends - The federal funds rate was at a 23-year high since July 2023 but was lowered in late 2024, with the effective rate at 4.33% and the average 30-year fixed mortgage rate at 6.35% as of mid-September 2025 [6][9] - The relationship between the Fed's rate cuts and mortgage rates is complex, influenced by various economic factors beyond just the Fed's actions [12][18] Borrower Considerations - Borrowers are advised to focus on controllable aspects of the mortgage process, such as comparing lenders and interest rates, rather than worrying about the federal funds rate [14] - Adjustable-rate mortgages may be beneficial for first-time buyers as interest rates are anticipated to decline, while fixed-rate mortgages offer consistency for those valuing predictability [15][17]