The big question I heard all week was simple: the Fed met, so are mortgage rates finally coming down? The short answer is that the Federal Reserve held its benchmark rate steady on Wednesday, and mortgage rates ended the week a little lower than the week before. That is welcome after a rough October, but rates are still higher than they were a year ago, and the Fed gave no promise about where it goes next.
Here is what actually happened over the past week or so, and what I think it means if you are buying or selling a home in Michigan right now.
The Fed held, but it was not a calm meeting
On October 28 the Federal Open Market Committee left its target range unchanged. The vote was not unanimous: two members wanted to raise rates again, following the increase the Fed made in September. The statement described the economy as growing at a strong pace, the job market as steady, and inflation as still elevated. Chair Warsh offered no forward guidance, which is his style, and said the committee needs more information before deciding on its next move.
What matters for you is this: the Fed is not in rate-cutting mode. Markets are now leaning toward the possibility of another increase at the December meeting. So if you have been waiting for the Fed to rescue mortgage rates, I would stop waiting for that specific event.
One thing I explain across the kitchen table every week: the Fed does not set mortgage rates. Mortgage rates follow the bond market, which reacts to inflation data, jobs data, and world events every single day. The Fed influences that, but the connection is loose, and mortgage rates often move before the Fed does.
Inflation came in warm, and that keeps rates sticky
The day after the Fed meeting, the government released September inflation data. The Fed's preferred measure, the PCE price index, rose faster than the month before, and the core reading that strips out food and energy picked up slightly as well. That is the opposite of what the bond market wants to see, and it is the main reason I am not expecting a sharp drop in rates any time soon.
The week ahead is busy. The October jobs report comes out Friday, and the October consumer price index arrives the following week. Those two reports will set the tone for rates heading into the holidays. A soft jobs number tends to push rates down. A hot inflation number tends to push them up.
Mortgage rates: a small step down after a hard October
Freddie Mac's weekly survey on October 29 showed the average rate on a thirty-year fixed loan dipped for the second week in a row, after climbing through early October to the highest level in nearly a year. The fifteen-year rate eased as well. Both are still well above where they sat last fall.
I want to be honest about what a dip like this means in practice. It is a modest improvement, not a turning point. If you are already pre-approved and under contract, a week like this is a good time to talk with me about your rate lock. If you are still shopping, do not let one week's move in either direction decide your timeline. The right house matters more than catching the exact bottom.
Housing data: buyers pulled back in September
Three reports landed in the last ten days, and together they tell a consistent story.
- Pending home sales (contracts signed in September) fell sharply from August and were down from a year earlier in every region, including the Midwest. The National Association of Realtors tied the drop directly to the jump in rates during September.
- Existing-home sales for September ticked up slightly from August, but August was revised lower and both months were among the slowest of the year. Inventory of homes for sale continued to build, and the median price nationally was still up from a year ago, though barely.
- New-home sales for September came in a touch below August. Builders have a large supply of finished and under-construction homes to move, and the national median new-home price was actually below a year ago.
Translation: fewer buyers are competing, listings are sitting a little longer, and sellers are negotiating more than they were a year ago.
Policy watch: credit reports and loan pricing
Two things are brewing at the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, that could affect conventional borrowers.
- The director has said FHFA is exploring whether lenders could pull one or two credit reports instead of three for loans that Fannie and Freddie buy. This is not final. Nothing has changed in how I pull credit today, and FHA loans still require all three reports. If it goes through, it could trim a small cost on the front end of a conventional application.
- FHFA also said it is still reviewing the loan-level price adjustments that Fannie and Freddie charge based on credit score, down payment and loan type, and expects a decision before the end of the year. Those adjustments are part of why two borrowers with the same loan amount get different rates.
I will cover both in this update when there is an actual rule to explain. Until then, treat anything you read about it as a proposal, not a program.
What this means if you are buying in Michigan
Buyers today have something they did not have in 2021 or 2022: time. Homes are sitting a bit longer, and sellers are more open to paying part of your closing costs or doing repairs after the inspection. That leverage is real, and it partly offsets higher rates.
Three things I would do this week if you are seriously looking:
- Get a full pre-approval, not a pre-qualification. With fewer buyers in the market, sellers are reading pre-approval letters closely. A real pre-approval means I have reviewed your credit, income and assets, so your offer is taken seriously.
- Ask me about every program you might fit. First-time buyers in Michigan should at least look at the MSHDA MI Home Loan and its down payment assistance, FHA, and USDA if the home sits in an eligible rural area. Veterans should look at VA. Eligibility depends on the full application, income limits and property location, and the limits change, so check the current numbers with me rather than a blog from last year.
- Plan for the rate you have, not the one you hope for. If rates fall after you close, refinancing is an option when it makes sense. Buying a home that fits your budget at today's rate is the safer bet than stretching on a hope.
What this means if you are selling
The September contract data is a reminder that buyers are rate-sensitive. When rates jumped, contracts fell. When rates eased this past week, showing activity tends to pick back up. Pricing right from day one matters more now than it did when every listing drew multiple offers.
- Expect buyers to ask for concessions, and decide in advance what you are willing to give.
- Ask your agent how long comparable homes near you have been sitting, not just what they sold for.
- If you are also buying, talk with me before you list. Timing the sale and the purchase takes planning, and there are ways to structure it so you are not stuck.
Next steps this week
Watch Friday's jobs report, because it will likely move rates more than anything the Fed said. If you are under contract, call or text me about your lock. If you are thinking about buying this winter, start the pre-approval now so you are ready when the right listing shows up. Winter buyers in West Michigan often face less competition, and that is worth something.
You can find answers to the most common questions I get on the FAQ page, or reach out directly and we will walk through your situation together.