Mortgage rates rise to 6.93% as labor market trends influence future outlook

The average 30-year fixed mortgage rate rose to 6.93% as of November 25, 2024, up from a 16-month low of 6.11% in September. This increase followed a drop in the unemployment rate to 4.1% in September and October. Analysts suggest that the labor market will be a key factor in determining future mortgage rates. If unemployment rises unexpectedly, mortgage rates may decline. Currently, the unemployment rate is within the Federal Reserve's target range, while inflation is slightly above it. The spread between the 10-year Treasury yield and the 30-year mortgage rate is also significant. If this spread narrows to its historical average, the mortgage rate could drop to around 6.05%.