Mortgage Rates Stay Anchored by Bonds, Not Fed Moves

Mortgage rates in the U.S. edged lower in early November 2025, with the average 30-year fixed rate settling near 6.4% as of October 31, according to CBS News. The decline followed back-to-back rate cuts by the Federal Reserve in September and October, which reduced the central bank's benchmark rate by 50 basis points over two meetings. However, the absence of a scheduled Fed meeting in November has left borrowers and lenders speculating about the trajectory of mortgage rates in the coming weeks.

Experts suggest that without a Fed policy shift, mortgage rates will likely remain stable, drifting modestly with bond market conditions rather than swinging dramatically. "If the Fed doesn't meet in November, I expect mortgage rates to drift with the bond market—modest day-to-day moves, not big swings," said Steven Glick, director of mortgage sales at HomeAbroad. He noted that Treasury yields, currently hovering near multi-year lows, would likely keep mortgage rates in the mid-6% range.

The market has already priced in two expected Fed rate cuts before year-end, according to Jeremy Schachter, a mortgage branch manager. "Today's rates already factor in those anticipated reductions," he added. This sentiment aligns with broader market trends. Rocket Companies Inc. (RKT), a major mortgage lender, reported in its Q3 earnings that the 30-year fixed rate had dropped 40 basis points to 6.3% in the third quarter, providing "much-needed rate relief" for borrowers, as reported by StockTwits. The firm's CEO, Varun Krishna, highlighted the positive impact on affordability, though he acknowledged that home price growth remained a drag on demand.

Despite these gains, the Fed's recent messaging has introduced uncertainty. Chair Jerome Powell signaled that a December rate cut "is not a foregone conclusion," tempering market expectations, according to USA Today. This letdown pushed mortgage rates upward to 6.33% in the days following the October meeting, as investors recalibrated their outlook. Fed officials, including Dallas President Lorie Logan and Kansas City President Jeff Schmid, have expressed caution, citing persistent inflation and a balanced labor market as reasons to delay further easing, as noted by Seeking Alpha.

Historically, the link between Fed rate cuts and mortgage rates has been tenuous. For example, the Fed's 100-basis-point reduction in late 2024 failed to translate into lower mortgage rates, which actually rose by nearly a percentage point, as noted in a CBS News piece. Analysts attribute this disconnect to the influence of Treasury yields and long-term inflation expectations. "Mortgage rates are more closely tied to the bond market than to the Fed's immediate actions," said Jeff DerGurahian, chief economist at loanDepot.

Looking ahead, the market remains divided. BOK Financial predicts rates could ease to 5.9%–6.0% if inflation continues to cool, but further Fed inaction or a reversal in price trends could push rates higher. For now, borrowers are advised to monitor the December Fed meeting closely. "The key is to stay prepared," said DerGurahian. "If rates dip further, locking in a refinancing deal could provide meaningful savings."