The average 30-year fixed mortgage rate spiked after the Federal Reserve cut rates. Experts say expectations for rate cuts in 2025 fueled the jump.

In remarks at a postmeeting press conference on Wednesday, Fed Chair Jerome Powell said that policymakers are now equally attuned to risks from both sides of the mandate, and would proceed cautiously with future rate cuts to avoid reigniting rapid inflation.

After three weeks of consecutive declines, the national average 30-year fixed rate mortgage (FRM) rose to 6.72% as of Dec. 19, according to Freddie Mac’s Primary Mortgage Market Survey (PMMS).  That’s up from a national average of 6.

Average 30-year mortgages have climbed to around 6.7% since the Fed started lowering rates in September. And they are only poised to rise further.

The Fed is likely to cut rates less than initially expected in 2025. What does this mean for mortgage rates and homebuyers next year?