July 23, 2024
Mortgage

Mortgage Interest Rates Today, Dec. 24, 2023


Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

Mortgage rates have dropped a lot since they peaked two months ago. Average 30-year mortgage rates neared 8% in October, but they’ve since dropped to well below 7%.

Most experts believe that mortgage rates will go down in 2024. This means that borrowers on the sidelines waiting for more affordability may finally get an opportunity to jump into the market and buy a home. But exactly how much more affordable could they be facing?

According to the Mortgage Bankers Association’s latest forecast, average rates could drop down to 6.1% by the end of next year and fall to the mid-5% range in 2025.

The Federal Reserve has indicated that it’s ready to start cutting the federal funds rate next year. In the MBA’s forecast commentary, chief economist Mike Fratantoni said potential Fed cuts are good news for the housing market.

“We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market,” Fratantoni said. “We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.”

Mortgage Rates Today

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Mortgage Refinance Rates Today

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Mortgage Calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.

Mortgage Calculator

$1,161
Your estimated monthly payment

  • Paying a 25% higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Paying an additional $500 each month would reduce the loan length by 146 months

By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.

30-Year Fixed Mortgage Rates

Last week’s average 30-year fixed mortgage rate was 6.67%, according to Freddie Mac. This is a 28-point decrease from the previous week.

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.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates. 

15-Year Fixed Mortgage Rates

Average 15-year mortgage rates fell to 5.95% last week, according to Freddie Mac data. This is a 43-point decrease since the week before.

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.

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve has increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has slowed significantly, but it’s still a bit above the Fed’s 2% target rate.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

The Fed has indicated that it’s likely done hiking rates and that it could start cutting next year. This has allowed mortgage rates to trend down somewhat.

When Will Mortgage Rates Go Down?

Mortgage rates increased dramatically over the last two years, but they’ve been falling in recent months, and are expected to drop further next year.

In November 2023, the Consumer Price Index rose 3.1% year-over-year. Inflation has slowed significantly since it peaked last year, which is good news for mortgage rates.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home 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 rates are relatively low compared to other loan options, including credit cards and personal loans. 



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