Mortgage rates fall again. Averages are half a point lower than a year ago.

All eyes now on Federal Reserve ahead of next week's meeting

The 30-year, fixed-rate mortgage average fell to 6.19% in the week ended Thursday, according to Freddie Mac. (David Alexander/CoStar)

By Ben Bryk with Coldwell Banker Global Luxury

December 4, 202512:46 PM ET

Mortgage rates are back near 2025 lows — falling for the second week in a row.

The 30-year, fixed-rate mortgage average dropped to 6.19% in the week ended Thursday, according to mortgage giant Freddie Mac. That's lower than last week and half a point beneath the average in the same week a year ago.

Similarly, the 15-year, fixed-rate mortgage averaged 5.44%, down from last week. A year ago, the loan averaged 5.96%.

Daily mortgage rates were also hovering near 2025 lows as of Thursday morning, with the 30-year, fixed-rate mortgage at 6.23% and the 15-year, fixed-rate mortgage at 5.75%.

All told, the big picture decline in mortgage rates has created "a more favorable environment for homebuyers and homeowners," according to Freddie Mac's chief economist, Sam Khater.

Expect mortgage rates to hold steady

With less than four weeks left in 2025, many market watchers aren't expecting any drastic changes in the mortgage market before the end of the year.

Mortgage rates will probably be "volatile but flat," Dick Lepre, senior loan officer at Realfinity, said in a Bankrate survey.

The source of that volatility? The Federal Reserve and the labor market, of course.

This week brought new data on the labor market, specifically regarding private sector hiring and unemployment claims. The results were somewhat extreme, but big picture, the numbers line up with what economists expected and support the ongoing hypothesis that the job market is sluggish, according to Brad Case, Homes.com's chief residential economist.

"We now have several pieces of information indicating some weakness in the labor market," Case told Homes.com.

That brings us to the Fed. The central bank meets next week to determine whether it will leave short-term interest rates as they are or lower them. The recent labor market updates have increased expectations that the bank will opt for the latter.

Although the Fed does not set mortgage rates, its decisions send ripple effects that usually have indirect sway on the mortgage market. This month, there's even more reason to expect that a Fed rate cut will influence mortgage rates because of efforts the central bank made in October to reduce excess liquidity in its balance sheet.

That said, "there's reason to think that if the FOMC cuts [their rate] target, then mortgage rates, too, would decline somewhat," Case said.

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