Freddie Mac Weekly Average

Every Thursday, Freddie Mac, a government-sponsored mortgage buyer, publishes a weekly average of 30-year mortgage rates. Yesterday’s reading was down a single basis point, leaving the weekly average at 6.78%, while as recently as September 26, the average fell to a two-year low of 6.08%. Last October, Freddie Mac’s average moved in the opposite direction, hitting a 23-year all-time high of 7.79%.

Freddie Mac’s average differs from what we report for 30-year rates because Freddie Mac calculates a weekly average combining five previous days of rates. In contrast, our Investopedia 30-Year Average is a daily reading, providing a more accurate and timely indicator of rate movement. Additionally, the criteria for included loans (eg, down payment amount, credit score, inclusion of discount points) varies between Freddie Mac’s methodology and ours.

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What causes mortgage rates to rise or fall?

Mortgage rates are determined by a complex interplay of macroeconomic and industry factors such as:

Since any number of these can cause fluctuations simultaneously, it is generally difficult to attribute the change to a single factor.

Macroeconomic factors kept the mortgage market relatively subdued for much of 2021. In particular, the Federal Reserve had been buying billions of dollars in bonds in response to the economic pressures of the pandemic. This bond purchase policy is a major influencer of mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making sizeable cuts each month until net zero in March 2022.

Between then and July 2023, the Fed hiked aggressively federal funds rate to fight inflation for decades. Although the federal funds rate can influence mortgage rates, it does not do so directly. In fact, the federal funds rate and mortgage rates can move in opposite directions.

But given the historic speed and magnitude of the Fed’s rate hikes in 2022 and 2023 – raising the benchmark rate by 5.25 percentage points over 16 months – even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates in the last two. years.

The Fed kept the federal funds rate at its highest level for nearly 14 months, starting in July 2023. But on September 18, the central bank announced the first rate cut in what is expected to be a series of declines in 2024 and likely 2025. This first cut was 0.50 percentage points.

On November 7, the Fed announced a further rate cut by 0.25 percentage points, bringing the federal funds rate to 4.5% to 4.75%. With this cut, the federal funds rate hits its lowest level since March 2023.

The Fed’s next rate announcement will be made on December 18.

How we track mortgage rates

The national and state averages mentioned above are provided as-is via the Zillow Mortgage API, assuming a loan-to-value ratio (LTV). of 80% (ie, a down payment of at least 20%) and an applicant credit score in the range of 680–739. The resulting rates represent what borrowers should expect when they receive quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.