On September 18, 2024, the Federal Open Market Committee lowered the target range for the federal funds rate by half a percentage point, to 4.75–5 percent. The statement called it a response to further progress on inflation and the balance of risks. It was the first cut since 2020. Governor Michelle Bowman voted no. She preferred a quarter-point cut, to a range of 5–5.25 percent.

The 30-year mortgage average did not follow that cut down. Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed-rate average at 6.09 percent as of September 19, 2024, and at 6.84 percent as of November 21, 2024.

The funds rate is the overnight rate between banks

The federal funds rate is the rate banks charge one another for overnight loans. The September 18 decision set a target range for that rate. A home buyer does not pay 4.75–5 percent on a 30-year mortgage because the committee published that range.

Freddie Mac's chief economist, Sam Khater, said the same day as the 6.09 percent print that mortgage rates do not directly follow moves by the Federal Reserve, and that the cut was mostly already in the recent decline of mortgage rates. The later rise is a separate fact. Between the September 19 survey and the November 21 survey, the weekly 30-year average went from 6.09 percent to 6.84 percent.

Both figures are weekly averages for the loans in that survey. They are not the rate on one application, and they are not a same-day jump at 2 p.m. on September 18. The September 19 reading was taken the day after the decision.

A 30-year mortgage is priced off longer yields

Kris Gerardi, an Atlanta Fed economist, said in a November 10, 2025 note that mortgage rates over the previous 20 years have lined up more closely with the 10-year Treasury yield than with the funds rate. The reason he gave is the average life of a mortgage, about seven to ten years. Growth expectations, fiscal policy, inflation expectations, and how readily borrowers refinance all sit in that longer yield. The funds rate is one input, not the mortgage rate itself.

In the same note, Gerardi's figures for September 2024 through January 2025 show the 10-year Treasury yield up by about 90 basis points while the funds rate was down by about 80. The Atlanta Fed presented those moves as evidence that the two rates can go in opposite directions. The Freddie Mac window from 6.09 percent to 6.84 percent is the mortgage-survey version of that stretch, ending before January.

Domonic Purviance, also of the Atlanta Fed, added that when borrowers are expected to refinance once rates fall, investors demand a premium on mortgage-backed securities so more of the return arrives sooner. That premium is another reason the mortgage rate can stay above, and move apart from, the overnight funds rate.

An existing note keeps the rate already written on it

The survey describes pricing on new loans in Freddie Mac's weekly sample. A loan that is already closed keeps the rate on the note until a refinance or until that note's own adjustment terms say otherwise. The half-point cut on September 18 changed the committee's target for overnight bank lending. It did not reprint the rate on mortgages already signed.

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