Mortgage Rates Likely to Fall Ahead of December Fed Meeting
The potential for falling mortgage rates is making headlines as the Federal Reserve prepares for its final meeting of 2025. Recent trends show that mortgage rates, after experiencing highs in 2022 and 2023, have begun a gradual decline. Homebuyers and homeowners looking to refinance may find opportunities before the meeting on December 9 and 10.
Anticipated Rate Cuts Ahead of December Fed Meeting
As of December 2, 2025, the likelihood of a 25 basis point rate cut at the upcoming Fed meeting stands at approximately 87%. This underlines a growing expectation for a reduction, which would follow prior cuts made in September and October 2025. The federal funds rate, already reduced by 75 basis points since September 1, could provide significant savings for many Americans.
Market Trends and Lender Responsiveness
Mortgage lenders may not wait for the Federal Reserve to formally announce a cut. Historically, they have been quick to adjust rates in anticipation of changes from the Fed. This suggests that mortgage rates might start declining even before the meeting concludes.
- In September 2024, mortgage rates dropped to a two-year low just before a 50 basis point cut.
- A similar trend occurred in September 2025, where rates fell to a three-year low ahead of a 25 basis point reduction.
- A drop was also observed in October following the September cut.
These patterns indicate that qualified borrowers might find attractive mortgage offers prior to the Federal Reserve’s decision.
Strategies for Homebuyers
Homebuyers should be proactive in their preparations to secure lower mortgage rates. While reviewing credit history and scores is essential, timely actions are necessary to capitalize on potential rate declines. Here are some strategies:
- Shop for Lenders: Comparing multiple lenders can lead to better rates and lower closing costs.
- Make a Larger Down Payment: A down payment exceeding 20% can reduce lender risk, potentially leading to lower rates.
- Consider Mortgage Points: Paying points upfront may yield lower interest rates over the life of the loan.
Taking these steps can help homebuyers position themselves favorably in a competitive market.
Final Thoughts
Mortgage rates are influenced by various factors, not solely the Federal Reserve’s actions. Trends suggest rates may decrease in anticipation of the December Fed meeting. Therefore, this could be an opportune moment to explore and potentially lock in favorable mortgage rates. Begin your search now to make informed decisions before the Fed’s anticipated rate cut.
