As we officially step into the heart of December, I hope this email finds you well, happy, and perhaps already enjoying the magic of the season!
This past week was one for the history books, and I want to make sure I break down the big news for you. Whether you’re a long-time homeowner, thinking about buying next year, or a trusted partner, understanding the forces that shape mortgage rates is key to making smart financial moves.
The Big News: The Fed Cut Rates (Again!)
On Wednesday, December 10th, the Federal Reserve concluded its meeting by doing what many expected: cutting the Federal Funds Rate by a quarter-percentage point (0.25 percent) to a new range of 3.5 to 3.75 percent. This marks the third rate cut we’ve seen in 2025!
Now, here’s where things get interesting, and where my expertise can really help:
• Mortgage Rates Didn’t Just Follow: While many people assume a Fed cut automatically means lower mortgage rates, the reality is more nuanced. The bonds that actually determine our long-term mortgage rates didn’t move much on the announcement itself.
• The Power of Words: The real movement came after the announcement, during Fed Chair Powell’s press conference. His comments hinting at a softening labor market (slower job gains) and growing evidence that inflation is coming down were key. When markets hear the Fed believes the economy is slowing and inflation is easing, it tends to be a green light for bond prices to rise, which in turn causes mortgage rates to move lower. This led to the lowest rates of the week for many lenders.
The Bottom Line: The market heard the possibility of another rate cut or two in 2026, and that sentiment supported an improvement in mortgage rates. This is positive news for anyone planning a purchase or refinance.
Where Mortgage Rates Stand Now
Before the Fed meeting, rates were already looking good. For the week ending December 4th, the 30-year Fixed-Rate Mortgage (FRM) trended down by .04 percent. That’s a significant improvement from one year ago, when the average was 6.69 percent!
The quiet trading environment we saw last week—where markets were just “hanging tough” and waiting for direction—was officially broken by this week’s action. Mortgage bond prices have been hovering near the best levels of 2025, which means home loan rates are doing the same.
My Takeaway for You
This environment of easing rates and a cooling labor market is gradually creating a more favorable and affordable housing landscape.
• If you are a homebuyer: While mortgage rates are not yet “low” by early century standards, they are significantly lower than a year ago. Affordability is slowly improving. If you’ve been on the sidelines, now is a great time to start getting pre-approved so you are ready to jump on a great opportunity.
• If you are a current homeowner: If you got your loan when rates were higher, let’s have a quick, no-pressure chat to see where you stand. Even a small drop in rate can make a big difference in your monthly budget. You’re welcome to send me an email or text/call me at 818.307.6072.
My goal, as always, is to be your reliable resource. I promise to keep watching these markets like a hawk, keeping you informed with honest, value-packed insights—not aggressive sales pitches.
