T
he Federal Reserve's latest interest rate cut failed to stem the tide of rising mortgage rates, with the 30-year fixed-rate mortgage averaging 6.79% for the sixth consecutive week. Despite the central bank's 25-basis point reduction, applications fell sharply as homebuyer demand waned.

    Key points:

    * The Fed stuck to its script at its November meeting, cutting interest rates by 25 basis points.

    * Mortgage rates continued to rise, with the 30-year fixed-rate mortgage averaging 6.79% this week.

    * Mortgage applications slowed due to a combination of rising rates and seasonality, with overall applications dropping 10.8% and purchase applications down 7%.

    * The housing market may be dealing with elevated mortgage rates for the rest of this year and into 2025.

    Fed Chairman Jerome Powell reassured that the results of the presidential election would have no immediate impact on fiscal policies, but acknowledged that labor market conditions had softened and unemployment remained low. Two consecutive rate cuts could potentially move the needle on mortgage rates, said Samir Dedhia, CEO of One Real Mortgage.

    Mortgage rates remain volatile, with a weekly Freddie Mac survey showing a 6.79% average for the 30-year fixed-rate mortgage, up from 6.72% the week before. This surge has led to a $200 monthly increase in mortgage payments for a typical homebuyer on a $400,000 property.

    Despite this, Mortgage News Daily suggests rates may have peaked, with a significant drop from a multi-month high of 7.13% on Nov. 6 to 6.98% on Nov. 7. Lisa Sturtevant, chief economist at Bright MLS, expects continued volatility but forecasts rates in the low- to mid-6% range by year-end.

    Looking ahead to 2025, mortgage rates are likely to continue coming down, assuming no major inflationary pressures, though it's possible to see the average rate on a 30-year fixed-rate mortgage remain above 6% through most of next year.