On October 28 the Federal Reserve, under new Chair Kevin Warsh, left interest rates unchanged. The vote was not unanimous: two of the 12 voting members wanted another quarter-point hike. The next day Freddie Mac's national 30-year fixed average actually fell to 7.24%, the lowest of the month. Here is what the two headlines mean together if you are buying a home or planning a loan.
What the Fed did
- Held steady. The target range stays at 3.75%–4.00%. The Fed raised rates by a quarter point in September, its first increase since July 2023 (Fox Business).
- Two dissents, both for a hike. Governor Lisa Cook and Cleveland Fed President Beth Hammack voted against the decision, preferring to raise the range by a quarter point now.
- A stronger read on the economy. The statement says activity is expanding strongly, spending has held up, and productivity and business investment are strong; job gains have kept pace with labor force growth and unemployment has barely moved; inflation remains elevated and the Committee wants more information before deciding its next step.
- The inflation numbers. September CPI was up 3.7% from a year earlier, above the 3.6% expected; gasoline rose 9.1% in the month and drove more than half of the increase. Core CPI, excluding food and energy, was up 2.6% (BLS data as summarized by Kiplinger).
- One change. Warsh said that starting in 2027, one of the eight annual meetings will be a strategy session with no rate vote.
Markets had already priced a hold (CME FedWatch showed about a 90.6% chance before the meeting), so the decision itself was no surprise; the two hawkish dissents were. After the meeting, futures put the odds of a hike on December 9 at about 73%, up from 42% a month earlier (Kiplinger). That is a market estimate, not a Fed commitment, and it moves every day.
Why mortgage rates fell anyway
| Freddie Mac release | 30-year fixed average | Weekly change |
|---|---|---|
| Sept. 24 | 7.03% | — |
| Oct. 1 | 7.28% | +0.25 |
| Oct. 8 | 7.40% | +0.12 |
| Oct. 15 | 7.40% | 0 |
| Oct. 22 | 7.32% | −0.08 |
| Oct. 29 | 7.24% | −0.08 |
The 15-year fixed averaged 6.60%, down 0.08 points. A year ago the 30-year averaged 6.17%, so today's rate is 1.07 points higher.
Mortgage rates do not track the federal funds rate directly; they follow the 10-year Treasury yield. The 10-year was about 5.0% before the open on October 26 (Kiplinger), so this week's 7.24% sits roughly 2.2 points above it (my rough math from those two numbers, a few days apart). If markets expect long-run inflation and growth to cool, mortgage rates can drift lower even while the Fed is hiking; if December brings a hike and hot inflation data, they can climb again.
Buyers are starting to move
The Mortgage Bankers Association's weekly survey released October 28 (week ending October 23):
- Total applications rose 3.4% from the prior week, with purchase applications up 4%, though still 18% below a year ago.
- Refinance applications were 61% below a year ago; most owners hold rates below today's, so refinancing doesn't pay.
- The adjustable-rate share rose to 11.3%, the highest in more than a year, as buyers look for lower early payments.
- MBA's average 30-year fixed contract rates: 7.37% for conforming loans, 7.28% for jumbo loans and 7.12% for FHA. This week jumbo averaged below conforming.
What a small rate change does to a budget
My rough math for a 30-year fixed, fully amortizing loan (principal and interest only, no taxes or insurance):
- From 7.40% to 7.24%: the same monthly payment supports about 1.6% more loan.
- Compared with 6.17% a year ago: the same payment supports about 10.4% less loan.
- If the 30-year average rises a quarter point from here (a hypothetical): the same payment supports about 2.4% less loan.
This is my own math to show the effect of rates, not a loan quote.
Before the December 9 meeting
- Under contract and waiting to close: this is the lowest-rate week of the month. Ask how long you can lock, whether locking through your closing date costs extra, and whether a float-down option is available. Waiting for December to lock is a bet on direction.
- Still shopping: get pre-approved at today's rate, not at the rate you hope for next year. Builders are adding price cuts and rate buydowns to hit year-end numbers (see Atlanta builders are slashing prices); on a resale home, a seller credit toward a rate buydown sometimes beats a price cut.
- Near or above the loan limit: the 2026 conforming limit is $832,750 across metro Atlanta and $1,249,125 in California's high-cost counties. With MBA's jumbo average below conforming this week, price out both; see the Georgia home loan guide and California loan limits and jumbo loans.
- Considering an ARM: an adjustable-rate loan is fixed only for the first years; after that the rate and payment can rise. It fits people who expect to sell or move within that period, and the adjustment caps deserve a close read.
- Thinking about a refinance: today's rates are above what most owners already have, so closing costs can outweigh the savings. Send me your current loan statement and I will work out the break-even; if it doesn't pay, don't do it.
Next steps
OrangePath's latest rate sheet, with APRs, is at the top of the loans page, updated with every new sheet. For a first purchase, see the first-time buyer loan guide.
The rates in this post are national averages and survey figures, not offers. Your rate depends on your credit, down payment, property type and loan amount. I am a Georgia real estate agent and a mortgage loan originator licensed in Georgia and California (loans only in California). To see what today's rates mean for your budget, or whether to lock now, send me your scenario: a 5-minute call or WeChat is enough to run the numbers. I will update this after the Fed's December 9 decision.
