The Weekly Freddie Mac Average

Every Thursday, Freddie Mac, a government-sponsored buyer of mortgages, publishes a weekly average of 30-year mortgage rates. Yesterday’s reading shaved off a single basis point, leaving the weekly average at 6.78%, while the average as of September 26 fell to a two-year low of 6.08%. Last October, Freddie Mac’s average moved in the other direction, rising to a historic 23-year high of 7.79%.

Freddie Mac’s average differs from what we report for 30-year rates because Freddie Mac calculates a weekly average that mixes five previous days’ prices. In contrast, our Investopedia 30-year average is a daily reading, providing a more accurate and timely indicator of price movements. Additionally, the criteria for included loans (eg, down payment amount, credit score, inclusion of discount points) varies between Freddie Mac’s methodology and our own.

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What makes mortgage rates rise or fall?

Mortgage rates are determined by a complex interaction between macroeconomic and industry factors, such as:

Since any number of these can cause fluctuations at the same time, it is generally difficult to attribute the change to any one factor.

Macroeconomic factors kept the mortgage market relatively subdued for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the economic pressures of the pandemic. This policy for purchasing bonds is a major influencer of mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making significant reductions each month until reaching net zero in March 2022.

Between then and July 2023, the Fed raised aggressively federal funds rate to combat decades of high inflation. While the Fed Funds rate can affect mortgage rates, it does not do so directly. In fact, the Fed Funds rate and mortgage rates can move in opposite directions.

However, given the historic speed and magnitude of Fed rate hikes in 2022 and 2023 – raising the benchmark rate by 5.25 percentage points over 16 months – even the indirect impact of the Fed Funds rate has resulted in a dramatic upward impact on mortgage rates in recent years two years.

The Fed kept the federal funds rate at its peak for nearly 14 months, beginning in July 2023. But on Sept. 18, the central bank announced the first rate cut in what is expected to be a series of reductions in 2024 and likely 2025. This first reduction was by 0.50 percentage points.

On November 7, the Fed announced a further rate cut of 0.25 percentage points, bringing the federal funds rate to 4.5% to 4.75%. With this cut, the Fed Funds rate reaches its lowest level since March 2023.

The Fed’s next interest rate announcement will be made on December 18.

How we track mortgage rates

The national and state averages cited above are provided as-is via the Zillow Mortgage API, provided that a loan-to-value ratio (LTV). of 80% (ie a down payment of at least 20%) and an applicant’s credit score in the range of 680-739. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2024. Use subject to Zillow Terms of Service.