Mortgage interest rates were mostly down compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 5/1 ARMs and jumbo loans decreased, while rates for 15-year fixed mortgages increased.
Mortgage rates could gradually come down this year, according to Greg McBride, CFA, Bankrate chief financial analyst. Mortgage rates cooled at the tail end of 2023 with the Federal Reserve pausing its campaign of rate hikes to tame inflation. The central bank now expects to cut rates in 2024 — a direction that would affect many areas of the economy, including on the 10-year Treasury, a key benchmark for fixed-rate mortgages.
“The 10-year Treasury yield that serves as a baseline for fixed mortgage rates will have a bouncy journey lower, moving back above 4 percent early in 2024 but trending lower as inflation cools and the Fed gets closer to cutting rates,” says McBride. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”
Rates accurate as of January 31, 2024.
The rates listed here are averages based on the assumptions here. Actual rates displayed on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, January 31st, 2024 at 7:30 a.m.
30-year fixed-rate mortgage moves down, -0.07%
The average rate you’ll pay for a 30-year fixed mortgage today is 6.96 percent, down 7 basis points from a week ago. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 7.06 percent.
At the current average rate, you’ll pay $662.62 per month in principal and interest for every $100,000 you borrow. That’s down $4.70 from what it would have been last week.
Use Bankrate’s mortgage rate calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. The tool will also help you calculate how much interest you’ll pay over the life of your loan.
15-year mortgage rate advances, +0.01%
The average rate for a 15-year fixed mortgage is 6.49 percent, up 1 basis point since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $871 per $100,000 borrowed. The bigger payment may be a little tougher to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more quickly.
5/1 ARM moves down, -0.01%
The average rate on a 5/1 adjustable rate mortgage is 6.12 percent, ticking down 1 basis point from a week ago.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.12 percent would cost about $607 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Jumbo mortgage rate falls, -0.06%
The average rate for the benchmark jumbo mortgage is 7.00 percent, down 6 basis points over the last week. A month ago, the average rate for jumbo mortgages was greater than 7.00, at 7.13 percent.
At the average rate today for a jumbo loan, you’ll pay a combined $665.30 per month in principal and interest for every $100,000 you borrow. That’s $4.04 lower, compared with last week.
Refinance rates
Current 30 year mortgage refinance rate slides, -0.02%
The average 30-year fixed-refinance rate is 7.16 percent, down 2 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was higher, at 7.21 percent.
At the current average rate, you’ll pay $676.08 per month in principal and interest for every $100,000 you borrow. That’s $1.35 lower, compared with last week.
Where are mortgage rates going?
The Federal Reserve has signaled that it intends to cut rates in 2024, depending on inflation and employment data and other factors. The Fed meets again on Jan. 31.
As of mid-January, the average 30-year fixed rate mortgage sits at just under 7 percent. As the year progresses, expect rates to slowly trend downward, says McBride.
“Mortgage rates will spend the bulk of the year in the 6s, with movement below 6 percent confined to the back half of the year,” says McBride.
The rates on 30-year mortgages mostly follow the 10-year treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves. These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.
What today’s rates mean for you and your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent any time soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
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Source: bankrate.com