Will mortgage rates fall without a February Fed meeting? Experts weigh in
Mortgage rates have fallen steadily over the last few months, which has been welcome news for potential homebuyers who have faced higher-than-average mortgage loan rates over the last few years. And just recently, mortgage rates hit their lowest point in over three years, hovering just above the 6% mark on 30-year fixed-rate mortgages.
You can chalk that rate decline up to a few factors, including the recent announcement of a $200 billion mortgage-backed securities (MBS) purchase and three rate cuts from the Federal Reserve last year. And while there's a chance the Fed cuts rates further and pushes down mortgage rates even more, the chances are low at its January meeting. After that? The central bank won't meet again until mid-March.
So, what does that mean for mortgage rates in the in-between period? Could mortgage rates still fall during this Fed-free February? Here's what experts say.
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Will mortgage rates fall without a February Fed meeting? Experts weigh in
It's still possible that mortgage rates fall in February, experts say, even without a Fed meeting on the docket. That's because while the Fed moves do have some trickle-down impact on mortgage rates, they're not the only influencer or even a key one. In fact, many other factors are much more important.
"Mortgage rates can absolutely fall in February even without a Fed meeting," says Darren Tooley, loan officer at Union Home Mortgage. "Mortgage rates don't move based on the Fed calendar or even Fed decisions. They respond to shifting market expectations. If incoming economic data points to slowing inflation or a cooling labor market, rates may continue to drop regardless of whether the Fed is actively meeting or not."
Inflation and employment numbers are important, as they influence the bond market, experts say. And if those numbers start driving investors more toward the safety of Treasury bonds, it could push mortgage rates lower as a result.
"It's still possible rates could drop in February if the bond market perceives that today's 2.6% Core CPI inflation is steady or dropping, and unemployment is steady at 4.4%," says Jeff Taylor, board member for the Mortgage Bankers Association and founder/managing director at Mphasis Digital Risk. "In this case, mortgage rates would drop as mortgage bonds rally."
You can track the bond market by watching the 10-year Treasury yield, which mortgage rates typically follow. When one rises, the other one generally does, too — and the same goes when yields fall.
Experts say mandates from the current administration could influence where mortgage rates head this February, too. For example, the recent announcement regarding a $200 billion MBS purchase helped push rates downward. Should similar news emerge in the coming weeks, it could push rates to fall even further.
"The administration seems to be bringing housing affordability into the forefront of its agenda," says Charles Goodwin, vice president of bridge and DSCR lending at Kiavi. "Look out for other ways the administration may try to intervene."
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How likely is it that mortgage rates will fall in February?
While there's a chance that mortgage rates will fall in February, most experts say it's probably not in the cards.
"February is more likely to be a month of modest movement rather than dramatic swings," Tooley says. "A gradual dip is possible if inflation continues to trend lower, but any decline is likely to be incremental, rather than a sharp drop."
Goodwin predicts rates will hover around 6% in February, while Mike Nielsen, sales manager for Churchill Mortgage, expects rates to fall somewhere between 6% and 6.375%.
"There is unfortunately a greater chance at rates moving higher than this range compared to much lower," Nielsen says. "A big increase would come from strong economic indicators that create potential inflation fear. Whenever there is a fear of inflation, there will always be pressure on rates. Inflation is the worst enemy of mortgage rates."
Right now, the Mortgage Bankers Association predicts the average 30-year mortgage rate will end the first quarter of 2026 at an average 6.4% rate. Fannie Mae projects a 6.1% average.
The bottom line
There's no telling where rates will head for sure this February, and as we get into the prime spring homebuying season, demand for homes — and home prices — will likely only rise. For this reason, experts recommend you run the numbers and act on a home purchase when the rate and payment work for your budget. It may also benefit you to talk to a financial advisor or have a mortgage professional walk you through your options. They can help you make the right choice for your goals and finances.