Mortgage Interest Rates Today: Mortgage Rates Drop to 6.19% as Likelihood of Another Fed Cut Rises

Mortgage rates edged down on Thursday below 6.20% for the first time in over a year in anticipation of next week's Federal Reserve meeting that is widely expected to deliver the year’s third overnight benchmark rate cut. 

The average rate on 30-year fixed home loans decreased to 6.19% for the week ending Dec. 4, down from 6.23% the week before, according to Freddie Mac. Rates averaged 6.69% during the same period in 2024.

"Mortgage rates decreased for the second straight week as we emerged from the Thanksgiving holiday,” says Sam Khater, Freddie Mac's chief economist. "Compared to this time last year, mortgage rates are half a percent lower, creating a more favorable environment for homebuyers and homeowners."

The rate stayed within the narrow range it has occupied for the past three months as markets assessed labor-market data for clues ahead of the final Federal Open Market Committee (FOMC) meeting scheduled for Dec. 9-10. 

Data released Wednesday by payroll processor ADP showed that the private sector lost 32,000 jobs in November.

In financial and prediction markets, the probability of another quarter-point rate cut, down from its current range of 3.75% to 4%, was roughly 89% to 93% early Thursday.

It means that a rate reduction is already largely priced into mortgage rates, which closely track the movement of the 10-year U.S. Treasury yield. 

"A December rate cut, which the market widely expects, could take further pressure off of mortgage rates as the year comes to a close, boosting buying power as the new year approaches," says Realtor.com® senior economic research analyst Hannah Jones. 

The Realtor.com economic research team's 2026 national housing forecast, released Wednesday, projects that mortgage rates are likely to decline relative to 2025, helping to offset the forecasted 2.2% home price increase and reduce monthly payments. 

"Inflation is also expected to outpace home price growth, resulting in real increases in buying power," says Jones. "At the same time, inventory is projected to grow by nearly 9%, offering buyers more options than they have had in years."

Still, regional differences remain pronounced. The South and West continue to benefit from fast-paced homebuilding, which has offered more for-sale supply and given buyers access to incentives that can help lower costs. 

In contrast, inventory in the Northeast and Midwest is expected to remain tight, meaning buyers in those regions may continue to face competitive conditions.

“Overall, the housing market is poised for a gradual improvement rather than a rapid turnaround. Easing mortgage rates and growing inventory should help buyers in 2026, even as affordability challenges persist,” concludes the analyst. 

How mortgage rates are calculated

Mortgage rates are determined by a delicate calculus that factors in the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield, which reflects broader market trends, like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.

When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to go up. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.

The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.

Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. They want to make sure you're able to pay back the loan.