Will mortgage interest rates drop after this week's Fed meeting?

Mortgage interest rates could decline again this week, thanks to another Fed rate cut. porcorex/Getty Images

The Federal Reserve is set to meet for the final time in 2025 this week and optimism over another interest rate cut is surging. The chances of a cut at the conclusion of the central bank's meeting on December 10 are now around 90%, according to the CME Group's FedWatch tool. That will bring the federal funds rate down to a range between 3.50% to 3.75% and, more importantly, potentially lower the interest rate costs for millions of borrowers.

This movement is especially highly anticipated by homebuyers, many of whom have been contending with elevated mortgage interest rates following the pandemic but who have seen small but material relief in the cooler rate climate of 20