Will mortgage rates fall after this week's Fed meeting?

A new Federal Reserve meeting this week could impact the mortgage rate climate. Getty Images

After not meeting in April and having had only two meetings so far in 2025, the Federal Reserve is set to meet again this week to determine the next steps in monetary policy. The central bank will also review its short- and long-term plans for interest rates, which will impact millions of American borrowers and savers. Following an interest rate cut campaign that saw the Fed issue three cuts in the final months of 2024 (combining to knock the federal funds rate down a full percentage point), the bank has elected to keep rates untouched so far this year, pausing rates in both its January and March meetings. But what the Fed does this week, or even simply hints at doing in the months ahead, could shake up both the borrowing and saving climates.

Borrowers would particularly welcome that shake-up should it mean additional rate cuts. Burdened by higher rates on everything from personal loans to credit cards and mortgages, a reduction in the federal funds rate could start to ease the borrowing pain many have been accustomed to in recent years. This is particularly true for homebuyers and homeowners looking to refinance. Mortgage rates have been elevated for much of the last three years, hitting their highest level since 2000 in 2023. And while they've come down since, more action and additional economic data will be required for them to decline further. But could that decline resume again this week? Specifically, will mortgage rates fall after this week's Fed meeting? That's what we'll analyze below.

See what mortgage rate you'd currently qualify for here.

Will mortgage rates fall after this week's Fed meeting?

While forecasting the future of interest is inherently difficult to do, the answer to this question is "maybe, but probably not." For starters, all signs are pointing toward the Fed keeping the federal funds rate the same, at least for May. As of May 5, the day before the Fed's two-day meeting, the CME Group's FedWatch tool had a rate cut projected at just a 1.8% likelihood. So it's safe to expect the federal funds rate to stay put at the current range between 4.25% and 4.50%. That, in turn, could keep rates on borrowing products that take direction from the Fed relatively unchanged. And considering that the federal funds rate is just one factor that drives mortgage rates (the 10-year Treasury yield, for example, is another), mortgage rates will likely end the week close to where they started.

However, there is an outlier to watch. After the two-day meeting, Federal Reserve Chairman Jerome Powell will hold a press conference to discuss the central bank's decisions and their potential next moves. If he hints at a rate cut to come in the June meeting (currently around a 30% chance according to the CME Group), rates on borrowing products like mortgages could, theoretically, decline slightly. That's because lenders don't need to wait for formal Fed action to start adjusting their rate offers. They can and often will change them preemptively, particularly if a cut for when the Fed meets again on June 17 and June 18 appears imminent. 

And with inflation steadily cooling in recent months and unemployment levels steady, there may be enough motivation for the Fed to take rate-cutting action before summer. So be sure to monitor mortgage purchase and refinance rates daily for an opportunity to act, even if it may not be as soon as this week.

Compare current rates and lenders online here.

How to get a low mortgage rate now

While "low" may be a relative description, particularly when mortgage interest rates were consistently around 3% or below around this point five years ago, there are still ways to secure an affordable rate now. Buyers should start by making sure their credit score and profile are in top shape, as lenders will inevitably offer higher rates to those with lower scores. They should also consider shopping for rates and lenders to see which ones are offering the lowest rates and best terms (getting quotes from at least three different lenders to compare is generally recommended). 

And, as noted, buyers should monitor the climate daily for small windows of opportunity to act. With mortgage rates impacted by a variety of factors, a low rate may materialize one day and vanish before the weekend, so if you're ready to buy now, be proactive and be ready to lock in a low rate when they're listed.

The bottom line

So, will mortgage rates fall after this week's Fed meeting? It's possible, but unlikely, as a Fed rate cut and, thus, a reduction in mortgage rates, currently appear more likely for this June. But this could easily change, and buyers and owners looking to refinance should be prepared to act promptly when and if it does. While mortgage interest rates are unlikely to fall as low as they were in 2020 and 2021, with the right moves and a proactive approach, an affordable rate can still be secured now.

Matt Richardson

Matt Richardson is the senior managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.