Mortgage rates steady ahead of Fed meeting as eyes turn to spring housing market

The Federal Reserve is set to wrap up what’s expected to be an uneventful two-day meeting on Wednesday. Mortgage rates remain in the low-6% range and aren’t likely to swing one way or the other as policymakers should keep benchmark rates unchanged.

Mortgage News Daily reported Monday that 30-year fixed rates averaged 6.17%, down 4 basis points in the past week. On Tuesday, HousingWire’s Mortgage Rates Center, which tracks locked loans across all borrower credit profiles, showed that 30-year conforming loan rates added 5 bps during the week, averaging 6.25%.

HousingWire’s data also showed that rates for 30-year loans through the Federal Housing Administration (FHA) averaged 6.03%, down 1 bps during the week, while rates for 30-year jumbo loans were at 6.10%, down 5 bps.

These relatively steady rate movements followed a more volatile week as financial markets anticipated and digested President Donald Trump’s speech at the World Economic Forum in Davos, Switzerland.

Trump touched on some key housing-related proposals during the forum, including restrictions on U.S. homebuying activities against large institutional investors and a $200 billion purchase of mortgage-backed securities by Fannie Mae and Freddie Mac. The moves aim to improve affordability for consumers through additional housing supply and lower mortgage rates.

But Trump also put the brakes on a reported proposal to allow tax-free withdrawals from 401(k) accounts for down payments on home purchases. All told, these moves have kept the housing market on relatively stable ground during a seasonally quiet period for sales activity.

“The mortgage market is off to a strong start in 2026. Mortgage rates declining to levels not seen since September 2024 have boosted borrower demand, with both refinance and purchase applications up solidly on both a weekly and an annual basis,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA).

“With the spring homebuying season approaching, lower mortgage rates would be a welcome development for households looking to buy a home.”

Fed meeting preview

After the Federal Reserve cut rates for a third straight time in December, monetary policymakers indicated less willingness to cut in the near future. Little has changed in the past six weeks, and interest rate traders are nearly unanimous that the central bank will hold the federal funds rate at a range of 3.5% to 3.75% on Wednesday, according to the CME Group’s FedWatch tool.

“The December vote was relatively close, with six officials in the dot plot signaling a preference to hold steady, suggesting a higher bar for additional easing as policy drifts back toward estimates of neutral,” said Sam Williamson, senior economist at First American.

“Even with a pause, the Fed is unlikely to frame the January decision as the end of the easing cycle,” he added. “Post‑meeting communications will likely emphasize that last year’s cumulative cuts give officials room to move more deliberately, while monitoring incoming data and broader financing conditions. If inflation continues to ease in a sustained way or if economic growth weakens more than expected, additional reductions later this year remain possible.”

A key inflation reading for December through the Consumer Price Index (CPI) found that price growth remained steady at 2.7% annually. Shelter, food and energy costs drove an increase of 0.3% from November.

Meanwhile, last month’s employment report from the U.S. Bureau of Labor Statistics showed that only 50,000 new jobs were added, while November’s number was trimmed to 56,000. The jobs report for January won’t arrive until Feb. 6.

“With a near zero percent chance of a January rate cut, markets are looking past the Fed meeting and toward next week’s employment data for the next meaningful signal,” said Jeff DerGurahian, chief investment officer and head economist for loanDepot. “Rates remain steady in the low 6% range, and early signs point to buyers gearing up for the spring season.”

DerGurahian also touched on another topic of interest to the markets by referencing reports that BlackRock chair Rick Rieder has emerged as the favorite to become the next Fed chair. Rieder was already a reported candidate and could move higher in the pecking order after Trump suggested that White House official Kevin Hassett might be staying put.

Trump has clashed frequently with current Fed chair Jerome Powell over interest rates and will seek to appoint a new chair who’s more closely aligned with his policy preferences.

Additionally, the president’s effort to dismiss Fed governor Lisa Cook is now under consideration by the Supreme Court and could give Trump more control of the central bank if the case is resolved in his favor.