Mortgage Interest Rates Forecast

Mortgage rates this week

Mortgage rates rose abruptly in the week ending Dec. 19.

• The 30-year fixed-rate mortgage averaged 6.73% APR, up 22 basis points from the previous week's average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

• The 15-year fixed-rate mortgage averaged 5.98% APR, up 18 basis points from the previous week's average.

• The 5-year adjustable-rate mortgage averaged 7.41% APR, up 14 basis points from the previous week's average.

The Federal Reserve reduced short-term interest rates by a quarter of a percentage point on Dec. 18. Borrowers might expect a Fed rate cut to be followed by a decline in mortgage rates. But the Fed did more than cut the federal funds rate; it also updated its outlook for 2025 — and in a way that was unfriendly to mortgage borrowers.

In September, the Fed had indicated that it expected to reduce the federal funds rate by one percentage point in 2025. But in its December update, the central bank implied that it now expects to cut the federal funds rate by only half a percentage point in 2025. Mortgage rates responded by jumping higher. There is room for rates to rise more in the coming days.