Mortgage Rates This Week – December 5, 2024

After mortgage rates shot higher leading up to and shortly following the election, rates have rallied over the past two weeks. Fear that we would move back up to the highs we saw in the Fall of 2023 has been tamed, at least for now. The markets are finally back to reacting to economic data instead of moving higher or lower based on election polls or political rhetoric. The 30-year fixed rate currently sits at 5.875%, 6.092% APR with points, and 6.500%, 6.535% APR with 0 points for borrowers with excellent credit and 25% down on a Single-Family Primary Residence.

Time flies and we are once again looking at the monthly Bureau of Labor Statistics (BLS) jobs report scheduled to come out tomorrow morning. The BLS report has recently been the most impactful economic report of the month since inflation has eased over the past year. Expectations are for over 200,000 jobs created in November and for the unemployment rate to rise from 4.1% to 4.2%. This report is expected to be a bounce-back report on the heels of last month’s much weaker-than-expected 12k jobs added, which was dismissed due to the two major hurricanes and labor strikes we saw in October. If we don’t see a bounce back and this report also disappoints, we can expect rates to continue to push lower and hopefully make a run at the lows seen in September. It’s important to note that the jobs report is incredibly difficult to predict as the BLS uses a lot of seasonal adjustments that don’t always make sense. Additionally, the initial number is almost always revised significantly in subsequent reports. Over the past year, the BLS has initially overstated job creation by hundreds of thousands, raising questions about the reliability of their initial data.

Yesterday, ADP released its employment report, which showed fewer jobs created than expected, at 146k vs. the 160k the markets expected. Additionally, October’s report was revised lower by 49k jobs. Oddly, ADP used seasonal adjustments to increase the raw number by 63,000. Generally, you would expect more seasonal hiring leading up to the Holidays, so it’s unclear why they seasonally adjusted higher. Without the seasonal adjustments, this would have been a big miss. With that said, the ADP number has not been a good predictor of the BLS data scheduled to come out Friday, and this report is usually not one the markets react to.

Late week, the Fed’s favorite measure of inflation (PCE), Personal Consumption Expenditures, showed headline inflation rose  0.2% for the month, with year-over-year inflation rising from 2.1% to 2.3%. The core rate, which excludes volatile food and energy costs, also rose 0.3%, and annual core inflation was up to 2.8%. While inflation hasn’t reached the Fed’s target of 2%, it continues to be moderate and could reach 2% in the first half of 2025. Shelter remains a key driver of inflation; however, both PCE and CPI calculate shelter costs on a lagging basis. According to the PCE data, shelter was the biggest contributor to inflation, rising by 5% yearly. Compare that to real-time data from CoreLogic showing Shelter increasing by just 2%, and hopefully, it’s only a matter of time before the data catches up in the inflation reports.

Last month, the October Consumer Price Index (CPI) showed inflation rising 0.2% for the month and increasing from 2.4% to 2.6% year-over-year, both in line with market expectations. The core reading, which removes volatile food and energy costs, increased 0.3% in October and remained 3.1% annually, as expected. Shelter costs continue to keep inflation elevated, accounting for nearly 50% of the increase in inflation. We have now seen Shelter costs, as determined by the BLS (Bureau of Labor Statistics), far outpace actual housing costs reflected by other data providers. Many economists, including the Fed, point to a lag in the BLS reporting because Shelter costs have remained high; however, this trend has been going on for over a year. At some point, we have to either see Shelter inflation decline or stop putting weight into data that doesn’t seem to reflect reality.

The Producer Price Index (PPI), which measures wholesale inflation, was up 0.2% in October, while year-over-year inflation rose to 2.4%. The core rate, which removes volatile food and energy prices, rose 0.3% last month, while year over year, the core rose 3.1%. This was a mixed report, with the year-over-year numbers jumping due to really low inflation data from last October; however, the data was in line with what the markets were expecting, resulting in minimal rate movement.

During their November meeting, the Fed cut its Fed Funds rate again, this time by .25%, a well-telegraphed move and exactly as the markets expected. Unlike the last time the Fed cut, mortgage rates improved following Fed Chair Power’s press conference. The markets liked his acknowledgment that he sees a substantial lag in shelter inflation and low replacement data for inflation over the next few months, and a rise in year-over-year inflation in the near term won’t derail the Fed’s desire to get the Fed Funds rate closer to neutral. Following the press conference, expectations for a December rate were back on the table after diminishing recently. The CME Groups Fed Watch tool currently shows a 72% probability that the Fed will cut by .25% in two weeks, up from 50% following the election.

Purchase activity has remained strong. Oddly, every year since COVID, we have seen the spring buying season push forward, with new applications remaining strong in November and December. This year, so far, is no exception, as many clients are trying to beat the spring rush. Clients who choose to get a fully underwritten preapproval are seeing more success getting offers accepted on high-demand homes.

To find the most affordable rate, compare different lenders and collaborate with a company that offers transparent mortgage rates and costs online. Experienced Mortgage Advisors and Loan Officers can guide you through the current market conditions and chart the most effective course forward.

Current Mortgage Rates This Week for WA, OR, ID, CA, and CO From Sammamish Mortgage
12/18/2024

**Conforming assumptions – $800k Purchase Price, 25% Down, 800+ Credit
**Jumbo assumptions – $1.5MM Purchase Price, 25% Down, 800+ Credit

Washington State mortgage rates

Mortgage rates In Oregon

Mortgage rates in Idaho

Mortgage Rates for Colorado

California Mortgage Rates

National Average Mortgage Rates:

(State-specific rates sourced from Sammamish Mortgage – National Average rates sourced from Zillow)

Consumer Price Index, Consumer Sentiment & Inflation

Without a doubt, the biggest driver of interest rates is inflation. With that in mind, we continue to focus on inflation data and expectations going forward to gauge what we can expect to see interest rates in the coming months. Current inflation is running well above the Fed’s annual target of 2%, pushing the Fed’s hand to raise short-term rates to slow things down. While current numbers remain elevated, we expect a significant reduction in the inflation readings in the coming months as various factors moderate the pace of inflation.

Consumer Price Index (CPI) October = -0.2% – Annual = 2.6%  

Producer Price Index (PPI) October = 0.2% – Annual = 2.4%

Personal Consumption Expenditures (PCE) October = 0.2% – Annual = 2.3% 

Overall, it is difficult to predict what will happen with mortgage rates in the near term. With global economic turmoil, banking issues, inflation, and thus far a far more resilient economy than many expected, trying to predict rates from one day to the next to time a rate lock is almost impossible or at least requires luck. However, looking at a longer time horizon, it’s much easier to see that there is an excellent chance we could see rates move lower from current levels, providing an opportunity for recent and existing buyers to potentially refinance in the future.

See Current Rates

What the Fed rate hike means for borrowers, savers, and investors

When the Federal Reserve raises interest rates, it affects various aspects of the economy, including the housing market, savings, and investment.

For potential homebuyers, a Fed rate hike typically leads to an increase in mortgage rates in the early stages of a tightening cycle; however, if the market thinks the Fed rate increases will hurt the economy and cause inflation to decrease, mortgage rates can improve when the Fed raises the Fed Funds Rate. It’s important to note that the Fed does not control mortgage rates. Fed rate increases do directly impact credit card rates, car loans, and commercial loans, which are shorter in duration than a typical 30-year fixed mortgage.

For savers, a Fed rate hike may lead to higher returns on savings accounts and certificates of deposit (CDs). In addition, banks and other financial institutions may increase the interest rates they pay to savers to remain competitive, which can benefit savers looking to earn more on their savings.

A Fed rate hike may impact the stock and bond markets for investors. Typically, when interest rates rise, the value of stocks and bonds can fall as investors may shift their money to fixed-income investments with higher returns. However, the impact of a rate hike on the markets can be complex and depends on various factors, such as the overall state of the economy, inflation expectations, and global events.

Loan Limits Increased For 2025

Loan limits have increased for 2025. Each county in every state has its loan limit. That said, the new standard conforming loan limit is $806,500, and high balance limits in select high-priced areas can go up as high as $1,037,300 for 1-unit properties in 2024.

Visit our 2025 conforming loan limit pages for Washington State, Oregon, Idaho, California,, and Colorado.

For FHA loan limits for 2025, visit our pages for Washington State, Idaho, Colorado, California and Oregon.

Check out our mortgage loan limit tool for conventional, FHA, and VA loans.

Instant Mortgage Rate Quote

Ready to Apply For a Mortgage?

Do you have questions about rates this week and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, Colorado & California. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Our programs include the Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Contact us today with any questions you have about mortgages.

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