Redfin predicts major mortgage rate pivot | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

As is always the case, economic conditions such as employment and inflation influence the Federal Reserve’s decisions regarding monetary policy, including interest rates, which in turn affect mortgage rates.

Total nonfarm payroll employment increased by 119,000 jobs in September and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported Nov. 20.

The unemployment rate rose from 4.33% to 4.44%, the highest level since October 2021.

Redfin analyzed the impact of the jobs report on action the Federal Reserve might take when it decides on interest rate policy at the next meeting of the Federal Open Market Committee (FOMC) on Dec. 10.

“The Fed is looking for a clear signal on the job market, but the September data is sending a mixed message with rising unemployment and strong jobs growth in leisure/hospitality and healthcare sectors,” Redfin wrote. “Overall, the message tilts negative, pointing to a weakening — but not recessionary — labor market.”

“Odds for a cut at the Fed’s Dec. 10 meeting will rise slightly, but the outcome of this meeting may be a nail-biter with the shutdown delaying the release of October and November jobs data until Dec. 16,” Redfin added.

Redfin, examining these economic developments in the context of their potential impact on mortgage rates, made a prediction.

“Mortgage rates will hold steady for now, but will wobble up or down between now and the Fed meeting as a rate cut gets fully priced in or priced out,” Redfin wrote.

Mortgage rates change toward stability

Freddie Mac reported on Nov. 20 that its Primary Mortgage Market Survey (PMMS) showed that the 30-year fixed-rate mortgage (FRM) averaged 6.26%.

“Mortgage rates have been shifting within a narrow ten-basis point range over the last month. This rate stability is a positive sign for both buyers and sellers, as it helps provide greater certainty in the housing market,” said Sam Khater, Freddie Mac’s chief economist.

Analysts say newfound mortgage rate stability would be a welcome change for a housing market that has long been unsettled by sharp swings.

The 30-year FRM averaged 6.26% as of Nov. 20, up from the prvious week when it averaged 6.24%, Freddie Mac reported. A year ago at this time, the 30-year FRM averaged 6.84%.

The government-sponsored enterprise also found that the 15-year FRM averaged 5.54%, up from the previous week when it averaged 5.49%. A year ago at this time, the 15-year FRM averaged 6.02%.

Redfin expects Fed interest rate action to influence mortgage rates

If mortgage rates continue to remain near 6.26% after months of volatility, homebuyers and sellers may gain a clearer view of borrowing costs, even if affordability remains strained.

Stability doesn’t mean rates are low — 6.26% is still historically elevated compared to the 3% to 4% range common in the 2010s.

But relative to the volatility of recent years, when rates surged past 7% and fluctuated week to week, a steady band around 6.26% could be seen as a positive shift.

More on homebuying:

Redfin offers further comments on interest rates in anticipation of monetary policy that can influence mortgage rates.

“Today’s jobs data, being both somewhat mixed and outdated (because of the government shutdown), does not definitively point the Fed in either direction,” Redfin wrote. “The latest FOMC minutes from the October meeting show a clear division about how to proceed. Deliberations amongst committee members, rather than economic data, will likely decide the outcome of the December meeting.”

“The BLS has not announced a release date for the October and November CPI (Consumer Price Index) reports, but they will almost certainly be after the Fed meeting as the original date was Dec. 10,” Redfin added.

The CPI reports offer a window on inflation, which also affects the Fed’s decision-making on interest rates.

Redfin outlines essential data from the BLS jobs report

The unemployment rate rose from 4.33% to 4.44%, the highest level since October 2021. The change was driven by a rise in labor force participation, meaning more people joining the labor force but not finding jobs yet. The unemployment rate has risen from the mid 3’s three years ago to 4.0% in January 2025 to now the mid 4’s as a result of years of tighter monetary policy and tariff policy.
119,000 jobs were created in September (vs. 50,000 expected), with 57,000 of the total in healthcare and 47,000 in leisure and hospitality. Other sectors were mostly flat or down.
The revisions indicate 33,000 fewer jobs were created in July and August than previously reported, meaning the data now shows negative job creation in June and August. However, the three- and six-month average rate of job creation are both around 60,000 jobs per month, which is near the break-even rate of job creation needed for the economy.
Overall, the narrative appears to be a weaker labor market that has maybe found some footing since the summer. However, the risk of further unwelcome deterioration is high given the concentration of job creation.