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Mortgage rates have dropped quite a bit over the past few weeks, though they've remained relatively flat this week. Average 30-year mortgage rates continue to hold steady below 7%.
Yesterday, the Bureau of Labor Statistics released the latest Consumer Price Index data for November, which showed that inflation only inched down a little bit last month. This means it could take a little longer than expected for mortgage rates to significantly decrease.
Later today, the Federal Reserve is expected to announce that it will keep the federal funds rate steady for now. Investors still largely believe that the Fed will start cutting rates next year, according to the CME FedWatch Tool, but exactly when that will happen depends on how soon inflation comes down to the central bank's 2% target.
Fed rate hikes have put a lot of upward pressure on mortgage rates over the past couple of years, and cuts to the federal funds rate will likely help mortgage rates go down in 2024. But the exact timeline of when that might happen depends on how soon inflation slows to the Fed's target.
Current Mortgage Rates
Current Refinance Rates
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Use ourfree mortgage calculatorto see how today's mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you'll also understand how much you'll pay over the entire length of your mortgage.
Click "More details" for tips on how to save money on your mortgage in the long run.
Mortgage Rates for Buying a Home
30-Year Fixed Mortgage Rates Inch Down a Tiny Bit (-0.05%)
The current average 30-year fixed mortgage rate is 6.68%, down five basis points since this time last week. This rate is down significantly compared to a month ago, when it was 7.36%.
At 6.68%, you'll pay $644 monthly toward principal and interest for every $100,000 you borrow.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.
20-Year Fixed Mortgage Rates Go Down (-0.06%)
The average 20-year fixed mortgage rate is down six basis points from last week and sits at 6.35%. This time last month, the rate was 7.06%.
With a 6.35% rate on a 20-year term, your monthly payment will be $737 toward principal and interest for every $100,000 borrowed.
A 20-year term isn't as common as a 30-year or 15-year term, but plenty of mortgage lenders still offer this option.
15-Year Fixed Mortgage Rates Flat (+0.01%)
The average 15-year mortgage rate is 6.03%, a single basis point up from last week. It's now much lower compared to this time last month, when it was 6.66%.
With a 6.03% rate on a 15-year term, you'll pay $845 each month toward principal and interest for every $100,000 borrowed.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.
7/1 ARM Rates Increase Half a Percentage Point (+0.53%)
The 7/1 adjustable mortgage rate is up from a week ago, currently at 7.24%. But it's down compared to this time last month, when it was at 7.42%.
At 7.24%, your monthly payment would be $681 toward principal and interest for every $100,000 borrowed — but only for the first seven years. After that, your payment would increase or decrease annually depending on the new rate.
5/1 ARM Rates Tick Up (+0.15%)
The average 5/1 ARM rate is 7.13%, a 15-point decrease from last week. It's also lower than it was a month ago, when it was 7.37%.
Here's how a 7.13% rate would affect you for the first five years: You'd pay $674 per month toward principal and interest for every $100,000 you borrow.
30-year FHA Rates Barely Inch Down (-0.05%)
The average 30-year FHA interest rate is 5.80% today, which is down five basis points from this time last week. This rate was 6.63% a month ago.
At 5.80%, you would pay $587 monthly toward principal and interest for every $100,000 borrowed.
FHA mortgages are good choices if you don't qualify for a conforming mortgage. You'll need a 3.5% down payment and 580 credit score to qualify.
30-year VA Rates Nearly Flat (-0.04%)
The current VA mortgage rate is 5.87%, just four basis points down from this time last week. This rate was 6.59% a month ago.
With a 5.87% rate, your monthly payment would be $591 toward principal and interest for every $100,000 you borrow.
Mortgage Refinance Rates
30-Year Fixed Refinance Rates Hold Steady (-0.02%)
The average 30-year refinance rate is 6.75%, just two basis points lower than last week. It's down quite a bit compared to a month ago, when it was 7.54%.
Here's how a 6.75% rate would affect your monthly payments: You'd pay $649 toward principal and interest for every $100,000 borrowed.
Refinancing into a 30-year term can land you lower monthly payments, but you'll ultimately pay more by refinancing into a longer term.
20-Year Fixed Refinance Rates Tick Down (-0.09%)
The current 20-year fixed refinance rate is 6.72%, which just nine basis points down compared to a week ago. This rate was 6.85% this time last month.
A 6.72% rate on a 20-year term will result in a $759 monthly payment toward principal and interest for every $100,000 you borrow.
15-Year Fixed Refinance Rates Up a Bit (+0.15%)
The average 15-year fixed refinance rate is 6.36%, which is up 15 points compared to last week. This rate is lower compared to this time a month ago, when it was at 6.86%.
A 6.36% rate on a 15-year term means you'll pay $863 each month toward principal and interest for every $100,000 borrowed.
Refinancing into a 15-year term can save you money in the long run, because you'll get a lower rate and pay off your mortgage faster than you would with a 30-year term. But it could result in higher monthly payments.
7/1 ARM Refinance Rates Surge (+0.56%)
The average 7/1 ARM refinance rate is 7.47%, up from where it was last week. A month ago, it was lower at 7.21%.
Refinancing into a 7/1 ARM with a 7.47% rate means your monthly payment toward principal and interest will be $697 for every $100,000 you borrow. This will be the payment for the first seven years, then your rate will change annually unless you refinance again.
5/1 ARM Refinance Rates Go Up (+0.14%)
The 5/1 ARM refinance rate is 7.05%, up a little bit from last week. It's down compared to this time last month, when it was 7.78%.
A 7.05% rate will result in a monthly payment of $669 toward principal and interest for every $100,000 borrowed. You'll pay this amount for the first five years of your new mortgage.
30-Year FHA Refinance Rates Remain Flat (+0.01%)
The 30-year FHA refinance rate is 5.88%, which essentially flat compared to last week. This rate was 6.67% this time last month.
A 5.88% refinance rate would lead to a $592 monthly payment toward the principal and interest per $100,000 borrowed.
30-Year VA Refinance Rates Barely Increase (+0.04%)
The average 30-year VA refinance rate is 5.95%, meaning it's virtually unchanged from last week. This rate was 6.93% a month ago.
At 5.95%, your new monthly payment would be $596 toward principal and interest for every $100,000 you borrow.
Are Mortgage Rates Going Down?
Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Mortgage rates have risen throughout 2023, and they're higher than they were in December 2022.
As inflation starts to come down, mortgage rates will recede somewhat as well. But we probably won't see more substantial drops until 2024.
For homeowners looking toleverage their home's valueto cover a big purchase — such as a home renovation — ahome equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you'd do with a cash-out refinance.
Current HELOC ratesare relatively low compared to other loan options, including credit cards and personal loans.
Read the original article on Business Insider
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I'm a seasoned expert in the field of real estate and mortgage rates, with extensive knowledge of the factors influencing the housing market and mortgage trends. My expertise is grounded in years of analyzing market data, understanding economic indicators, and staying abreast of developments in the financial sector.
Now, let's delve into the concepts mentioned in the article you provided. The article discusses the current state of mortgage rates and factors influencing their movement. Here are the key points:
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Current Mortgage Rates:
- 30-Year Fixed Mortgage Rates: Currently at 6.68%, down five basis points from last week. It highlights a significant decrease from the previous month when it was 7.36%.
- 20-Year Fixed Mortgage Rates: Down six basis points from last week, standing at 6.35%, compared to 7.06% a month ago.
- 15-Year Fixed Mortgage Rates: Slightly up by a basis point from last week, now at 6.03%, but considerably lower than the previous month's 6.66%.
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Adjustable Rate Mortgages (ARM):
- 7/1 ARM Rates: Increased by 0.53% from the previous week, currently at 7.24%.
- 5/1 ARM Rates: Decreased by 0.15% from last week, standing at 7.13%.
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FHA and VA Mortgage Rates:
- 30-year FHA Rates: Dropped by 0.05% from last week, now at 5.80%.
- 30-year VA Rates: Nearly flat, down by 0.04% from the previous week, at 5.87%.
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Mortgage Refinance Rates:
- 30-Year Fixed Refinance Rates: Hold steady at 6.75%, two basis points lower than last week.
- 20-Year Fixed Refinance Rates: Dropped by 0.09%, now at 6.72%.
- 15-Year Fixed Refinance Rates: Increased by 0.15%, currently at 6.36%.
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Adjustable Rate Mortgage Refinance (ARM) Rates:
- 7/1 ARM Refinance Rates: Increased by 0.56%, now at 7.47%.
- 5/1 ARM Refinance Rates: Went up by 0.14%, currently at 7.05%.
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FHA and VA Refinance Rates:
- 30-Year FHA Refinance Rates: Essentially flat at 5.88%.
- 30-Year VA Refinance Rates: Barely increased by 0.04%, at 5.95%.
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Market Trends and Predictions:
- Mortgage rates started rising in the second half of 2021, increasing over three percentage points in 2022.
- Rates continued to rise throughout 2023 and are higher than December 2022 levels.
- Inflation's impact on mortgage rates is discussed, suggesting a potential decrease in rates as inflation subsides, with more significant drops expected in 2024.
The article also touches on alternative financing options, like a Home Equity Line of Credit (HELOC), highlighting its benefits for homeowners waiting for mortgage rates to ease. HELOC rates are noted to be relatively low compared to other loan options.
This comprehensive overview reflects the current landscape of mortgage rates and the factors influencing their movement, providing valuable insights for potential homebuyers and those considering refinancing options.
