T
he Federal Reserve may still opt for an interest rate cut this month as signs point to a cooling labor market. The latest jobs report showed a stronger-than-expected rebound in November with 227,000 jobs added, but the unemployment rate rose to 4.2%. This trend of fewer people quitting and fewer openings has been dubbed "The Great Stay" by economists.

    A slower hiring pace and increased number of unemployed individuals boost the chances of a quarter-point interest rate cut when the Federal Reserve meets in December. Although mortgage rates are not directly tied to interest rates, they tend to influence each other. This fall, mortgage rates defied expectations by trending higher despite two rate cuts.

    Economists predict that 30-year mortgage rates will remain around the upper 6% range for the rest of 2024 and may drift modestly lower in 2025. The upcoming consumer price index report could provide insight into future mortgage rates. "At this point, mortgage rates in the mid-6s are probably the best prospective homebuyers can expect," said Lisa Sturtevant, chief economist at Bright MLS.

    The incoming Trump administration's policies may also impact the housing market for 2025. However, it remains to be seen whether these policies will result in a "Trump bump" or not, depending on their specifics and timing.