Mortgage Rates Near the Lowest Levels Since October
As we head toward the close of 2025, the mortgage market delivered a welcome bit of holiday cheer. The latest inflation data came in cooler than expected, and mortgage rates responded positively.
Here is what happened this week and what it means moving forward.
CPI Came in Colder Than Expected
The November Consumer Price Index (CPI) report showed inflation running softer than forecasts. That is important because CPI is one of the most closely watched inflation gauges and a key driver of interest rate movement. Lower inflation generally supports lower mortgage rates, and this report did exactly that.
Mortgage Rates Reacted Favorably
Following the CPI release, mortgage rates moved closer to their lowest levels since late October. In fact, aside from two brief days at the end of November when rates were just a hair lower, today’s average 30 year fixed rates are the best we have seen in over a month.
It is also worth noting that much of the improvement was already in place before the CPI data was released. The report helped reinforce market confidence rather than create a sudden shift.
What This Means for the Fed
With inflation continuing to cool, the Federal Reserve has more breathing room heading into 2026. While this does not guarantee rate cuts, it supports the broader narrative that the Fed may be able to ease policy over time if inflation continues trending in the right direction.
Looking Ahead
CPI marked the final major economic report of 2025 that typically has a significant impact on mortgage rates. That does not mean rates will not move between now and January, but it does mean big swings tied to economic data are less likely in the near term.
As always, daily rate movement will still be influenced by market sentiment, bond trading, and global events.
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Written by John Pyne, SVP Regional Manager and Mortgage Advisor based in Northern Virginia. Specializing in first time homebuyers and strategic financing solutions across the DC Metro area.