Mortgage Rates Today, Jan. 29, 2025: It's Fed Day and There May Be Fireworks
The average 30-year fixed rate mortgage is 6.88% today, a decrease of 0.03% since yesterday. The 15-year fixed mortgage rate stands at 5.92%, down by 0.06%. The 30-year FHA mortgage now averages 6.2%, having dropped by 0.03. Meanwhile, the 30-year jumbo mortgage rate is 7.24%, reflecting a decrease of 0.03%.
Update: As expected, the Federal Reserve held its key interest rate steady at 4.25-4.5%. It cited "somewhat elevated" inflation and strong labor conditions in its reasoning.
The bigger picture
Fed rate cut unlikely
Today, the Federal Reserve winds up the current two-day meeting of its rate-setting body, the Federal Open Market Committee (FOMC). A small cut to general interest rates this afternoon remains a possibility. But it's pretty unlikely. Overnight, the CME FedWatch tool still put the chances of those rates holding steady at 96.8%, unchanged since yesterday.
The Fed signaled at its December FOMC meeting that it planned only two rate cuts through the whole of 2025, with June and December popular bets among investors. That's fewer than was previously expected.
"Right now, Fed officials are particularly attuned to ensuring that consumer and business inflation expectations re-anchor at their 2% target after four consecutive years of overshooting that target," said Axios yesterday. According to the consumer price index, it was running at 2.9% in December.
Powell vs. Trump
Now, the central bank looks to be on a collision course with the White House. Fortune takes up the story: "Before President Donald Trump’s election victory, economists warned that the policies he promised on the campaign trail were inflationary. They were worried about his policies for mass deportation, tariffs, and tax cuts. Since his inauguration, Trump has begun his deportation efforts and threatened countries with tariffs.
"All the while, Trump appears to be applying pressure on the Fed and
its chair, Jerome Powell. Speaking virtually to the World Economic Forum
in Davos, Switzerland, last week, Trump said he would 'demand that interest rates drop immediately.'"
The president went on to claim, "I think I know interest rates much better than they do, and I think I know it certainly much better than the one who’s primarily in charge of making that decision." He was referring to the Fed and Powell.
Powell news conference a possible flashpoint
At 2:30 p.m. Eastern this afternoon, Powell gets a chance to respond when he hosts a post-meeting news conference. He's unlikely to match Trump's confrontational tone, but he might quietly make clear the central bank's take on its future rates policy and how that's affected (if at all) by the new administration's agenda.
Comerica Bank's chief economist wrote on Monday, "Financial markets will be keen to hear how the Trump administration’s policies are changing Fed’s outlook for growth and inflation, following the wave of executive orders announced after the inauguration."
But how likely is Powell to resist the president's demands? The second lead headline in this morning's Financial Times says, "Federal Reserve set to repel Donald Trump's calls for deep rate cuts — Economists warn that political meddling in monetary policy ‘can often go very badly’."
If Powell takes a neutral line, mortgage rates may barely budge. But, were he to suggest that there will be only two or fewer rate cuts this year, those rates might rise. Only if he puts more cuts on the table are mortgage rates likely to fall as a result of his remarks.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.88% | 6.92% | -0.03% | -0.06% |
| 15-Year Fixed | 5.92% | 5.98% | -0.06% | -0.08% |
| 30-Year Fixed FHA | 6.2% | 7.03% | -0.03% | +0.05% |
| 30-Year Fixed VA | 6.28% | 6.43% | -0.03% | +0.08% |
| 30-Year Fixed USDA | 6.2% | 6.34% | +0% | +0% |
| 30-Year Fixed Jumbo | 7.24% | 7.26% | -0.03% | -0.12% |
| 5/6 Year ARM | 7.02% | 7.09% | +0.01% | +0.13% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.95% | 6.98% | -0.06% | -0.05% |
| 15-Year Fixed | 5.91% | 5.97% | -0.06% | -0.09% |
| 30-Year Fixed FHA | 6.18% | 7.01% | -0.04% | +0.04% |
| 30-Year Fixed VA | 6.29% | 6.44% | -0.03% | +0.08% |
| 5/6 Year ARM | 6.8% | 6.83% | +0% | -0.18% |
Coming up
Although economic reports are the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates.
This afternoon's news conference by the Fed's chair might count as consequential news and could change the general mood in markets — for the better or worse.Mortgage rates today and tomorrow
Today's economic reports are typically yawnfests for those who determine mortgage rates. They cover advanced inventories in the wholesale and retail sectors and advanced trade balance in goods — all for December. We'll be surprised if they move those rates even a little, especially with all eyes on Powell's news conference.
Tomorrow's big report is the first estimate of gross domestic product (GDP) during the fourth quarter of 2024. That's expected to dip to 2.5% compared with 3.1% in the third quarter, says MarketWatch. A figure lower than 2.5% could help mortgage rates ease lower.
