Will an October Fed Rate Cut Affect St. Louis Mortgage Rates?

As summer ends and September draws to a close, St. Louis homebuyers and homeowners are watching the Federal Reserve closely. The Fed’s October meeting could be important, especially with recent pressure to lower rates. President Trump has publicly urged Fed Chair Powell to resign and “fired” Fed governor Lisa Cook over alleged occupancy fraud. Meanwhile, a new statistician is now in charge of the monthly labor report—another factor that could influence the Fed’s decision.

So, the question on every St. Louis homebuyer’s mind: Will a Fed rate cut in October lead to lower St. Louis mortgage rates?

What Happened to Mortgage Rates After the Last Fed Cut

Many people assume mortgage rates always fall after a Fed rate cut. In reality, 30-year fixed mortgage rates rose after the September cut this year—and the same thing happened in September 2024. But context is key.

Before the cut, mortgage rates were already near a 19-month low. The 30-year fixed rate had dropped from just above 8% in October 2023 to slightly over 6%—a sharp decline in a short time. Since the market often anticipates Fed moves, a small rate increase afterward is not unusual.

The main reason rates rose? Not the Fed cut, but a strong jobs report that shifted the trend. Political developments, including a Trump presidential victory, pushed rates even higher.

What Could Happen in October

Looking ahead to October, it could feel like history repeating itself:

• Mortgage rates were near a 19-month low at last year’s Fed cut.
• Rates bounced slightly on the news but moved mainly due to labor and economic reports.

This year, the 30-year fixed St. Louis mortgage rate sits around 6.37%, its lowest level since last October before a hot jobs report pushed rates higher. If new labor or CPI reports come out after a potential Fed cut, mortgage rates could increase—even if the Fed lowers its benchmark rate. Conversely, softer economic data could push St. Louis mortgage rates down further, making the Fed cut appear responsible.

The key point for anyone buying a home in St. Louis or refinancing: economic data drives mortgage rates far more than the Fed meeting itself. The Fed meets only eight times a year, while mortgage rates change daily. Essentially, the Fed reacts to economic trends rather than setting them.

Carlson Mortgage: Your Trusted St. Louis Mortgage Broker

If you’re looking for the lowest St. Louis mortgage rates and a local mortgage broker you can trust, Carlson Mortgage is here to help. We never charge broker fees, processing fees, or points, making it easier for you to buy a home in St. Louis or refinance your mortgage.

With over 20 years of experience in the mortgage industry and 15 years owning Carlson Mortgage, I’ve helped thousands of St. Louis homeowners secure conventional, FHA, VA, and Jumbo loans up to $3.5 million. Whether you’re a first-time homebuyer or an experienced homeowner, we’ll guide you through every step of the mortgage process.

Contact Carlson Mortgage today at 314-329-7314, visit www.carlsonstl.com, or email info@carlsonstl.com to learn how we can help you get the best St. Louis mortgage rates for your next home.

Looking to Purchase or Refinance?

At Carlson Mortgage, we’re dedicated to helping St. Louis residents navigate the mortgage process and find the perfect loan for their needs. Our experienced mortgage brokers can help you find the right mortgage to fit your needs and budget and will help you make informed decisions about buying a home. Call or text us at (314) 329-7314 or fill out our loan application at www.carlsonstl.com/apply for a purchase or a refinance mortgage.