Mortgage Rates Rise: What Homeowners Can Do Now

How Homeowners and Buyers Can Still Beat High Mortgage Rates With Two Smart Moves

Mortgage rates are rising sharply even though the Federal Reserve is widely expected to cut rates this week — a break from the usual pattern. Typically, when markets anticipate Fed cuts, the 10-year Treasury yield falls, pulling 30-year mortgage rates down with it.

This time, the opposite happened. On Monday, the average 30-year mortgage rate jumped nine basis points to 6.36%, its highest level in two weeks, according to Mortgage News Daily. The 10-year Treasury also climbed to 4.17%, signaling that markets aren’t reacting the way they normally do ahead of a rate cut.

Jeffrey Ruben, president of WSFS Home Lending, said the 10-year and 30-year yields “are not behaving as they traditionally would,” pointing to two main reasons:

• Bond investors are reassessing what the Fed will do after December’s cut, especially with inflation still lingering.
• Traders expect rate cuts to pause once the Fed gets closer to a “normal” interest rate level around 3%. The Fed’s effective rate stood at 3.88% ahead of Wednesday’s meeting.

Fed Cuts Aren’t Pushing Mortgage Rates Lower

The spike in mortgage rates works against the Trump administration’s goal of reducing borrowing costs to revive the housing market. High prices and elevated mortgage rates continue to sideline buyers, while homeowners are still waiting for the right moment to refinance and ease monthly expenses.

Despite multiple Fed cuts in 2025, the 30-year fixed mortgage rate hasn’t dipped below 6% all year. Its lowest point was 6.13% in September and October — and it hasn’t been under 6% since February 2023.

Two Practical Mortgage Moves You Can Make Right Now

Even in this tough rate environment, homeowners and buyers still have options to lower monthly housing costs:

1. Consider an Adjustable-Rate Mortgage (ARM)

ARMs offer much lower initial rates compared to 30-year fixed loans. As of Nov. 28, the average 30-year fixed rate was 6.32%, while the five-year ARM averaged just 5.4%, according to the Mortgage Bankers Association.

While ARMs carry some risk, they can help buyers secure a lower entry rate. If mortgage rates fall in the next few years, borrowers can refinance into a lower, fixed-rate mortgage later on.

2. Ask Your Lender for a Rate Modification

Homeowners can also request a rate adjustment from their lender. A rate modification lowers your existing mortgage rate without refinancing — meaning your loan terms stay the same and your credit isn’t affected.

Lenders often agree because it keeps the loan with them rather than losing the borrower to another lender.