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Mortgage rates climbed to the highest level since Oct. 9 amid disappointment a third consecutive rate cut in December may not materialize, analysts said.

The Federal Reserve on Oct. 29 lowered its short-term benchmark rate by a quarter point to 3.75%-4%. However, Fed Chair Jerome Powell said in a press conference a December rate cut “is not a foregone conclusion,” dashing market expectations for one.

The CME Fed Watch tool, which tracks the likelihood for a rate move at each Fed meeting, showed chances falling to just 66.6% after the Fed meeting and currently hover near 73%. Still, that’s a far cry from the 91.1% probability a week earlier.

Mortgage rates, which were sitting near their lowest levels of the year heading into the meeting around 6.13%, rose to 6.27% right after Powell’s comments. They rose further to 6.33% on Oct. 30.

“The tone of Chair Powell’s comments poured some cold water on hopes for a faster pace of cuts, coming in less friendly than anticipated and pushing yields modestly higher across the curve,” said Jeff DerGurahian, chief investment officer and head economist at nonbank mortgage lender loanDepot.

Was this deja vu?

Before the Fed lowered interest rates in September, mortgage rates fell to 6.13%, the lowest level in nearly a year in anticipation of a rate cut. After the Fed produced a 0.25-percentage point reduction, mortgage rates rose.

Similarly, even as the Fed cut rates by a point over several meetings in late 2024, mortgage rates moved in the opposite direction, rising nearly a point, according to online financial products marketplace Bankrate.

Will mortgage rates drop again?

Mortgage rates may ease slightly to aroound 5.9% to 6.0%, BOK Financial predicted.

Cooler inflation and a slower labor maket could continue to support the potential for lower rates, but even if they don’t fall, DerGurahian noted that mortgage rates still hover near annual lows.

What does this mean for home buyers?

An expected dip in mortgage rates isn’t likely enough to help house hunters much, analysts said.

“With over 80% of mortgages below 6%, the “lock-in effect” continues to constrain inventory and keep (home) prices elevated,” BOK Financial said.

Fannie Mae projects 2026 home sales at 5.16 million, lower than earlier forecasts for 5.23 million, partly due to affordability issues.

But for those who already own a home, “on the bright side, Wednesday’s cut will immediately lower HELOC (Home Equity Line of Credit) rates,” DerGurahian said.

A HELOC is a revolving line of credit secured by the equity in your home. It allows you to borrow funds as needed up to a specific limit and pay back what you use, plus interest.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and  subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.