National mortgage rates rose for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans jumped.
While it’s expected that rates will gradually come down this year, the path might be bumpy.
“Mortgage rates will be bouncy week-to-week but will most likely settle towards 6 percent by the year end,” said Lawrence Yun, chief economist for the National Association of Realtors.
At its Jan. 31 meeting, the Federal Reserve announced it would hold off changing rates and affirmed its plan to slash rates this year. Rate changes affect many areas of the economy, including 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 Greg McBride, CFA, Bankrate chief financial analyst. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”
Rates last updated February 27, 2024.
The rates listed above are Bankrate’s overnight average rates and are based on the assumptions indicated here. Actual rates listed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, February 27th, 2024 at 7:30 a.m.
30-year mortgage rate trends higher, +0.05%
Today’s average rate for the benchmark 30-year fixed mortgage is 7.34 percent, up 5 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 6.96 percent.
At the current average rate, you’ll pay a combined $688.29 per month in principal and interest for every $100,000 you borrow. That’s $3.40 higher compared with last week.
15-year fixed mortgage rate moves upward, +0.14%
The average 15-year fixed-mortgage rate is 6.76 percent, up 14 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost $885 per $100,000 borrowed. The bigger payment may be a little more difficult 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 faster.
5/1 ARM rate climbs, +0.04%
The average rate on a 5/1 ARM is 6.19 percent, adding 4 basis points over the last 7 days.
Adjustable-rate mortgages, or ARMs, are mortgage terms 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 refinance or sell 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 6.19 percent would cost about $612 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 moves higher, +0.03%
The average rate you’ll pay for a jumbo mortgage is 7.38 percent, up 3 basis points over the last seven days. Last month on the 27th, the average rate was lesser at 7.00 percent.
At the current average rate, you’ll pay $691.02 per month in principal and interest for every $100,000 you borrow. That’s up $2.05 from what it would have been last week.
Mortgage refinance rates
Today’s 30-year mortgage refinance rate retreats, -0.07%
The average 30-year fixed-refinance rate is 7.24 percent, down 7 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower at 7.16 percent.
At the current average rate, you’ll pay $681.50 per month in principal and interest for every $100,000 you borrow. That represents a decline of $4.75 over what it would have been last week.
Where are mortgage rates heading?
With inflation still above the Fed’s 2 percent goal and the job market holding strong, the Fed isn’t likely to cut rates at its March meeting.
“The Federal Reserve will not cut interest rates in the first half of this year, in my view,” says Yun, “but rate cuts of three, four or even five rounds will be possible in the second half of the year as rent measures will be much more well-behaved.”
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 current rates mean for you and your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime 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