While lower mortgage rates have reinvigorated hope for the stalling housing market, 2025 might not wind up much better than 2024.
Sure, lower interest rates boost affordability, but there are other components to a home purchase that remain cost-prohibitive.
Whether it’s simply an asking price that’s out of reach, or rising insurance premiums and lofty property taxes. Or other monthly bills that eat away at the housing budget.
This explains why mortgage origination forecasts for purchase lending continue to be pretty dismal.
However, the emerging trend of rising mortgage refinance volume should get stronger into 2025.
2024 Purchase Volume Has Been Revised Down
A new report from iEmergent revealed that 2024 purchase mortgage originations are projected to fall in terms of loan count when compared to 2023.
In other words, despite lower mortgage rates, the number of home purchase loans is now expected to fall below 2023 levels.
However, thanks to an increase in average loan size, the company believes purchase loan volume will still see a modest increase of 3.5% year-over-year.
To blame is still-high mortgage rates, which peaked about a year ago and have since fallen nearly two percentage points.
But home prices remain elevated, and when combined with a 6% mortgage rate and steep insurance premiums and rising property taxes, the math often doesn’t pencil.
Adding to affordability woes is the continued lack of existing home supply. There simply aren’t enough homes for sale, which has kept prices high in spite of reduced demand.
Refis Expected to Jump Nearly 50% from 2023 Lows
On the other side of the coin, mortgage refinances are finally showing strength thanks to that pronounced decline in mortgage rates.
They bottomed in late 2024 when the 30-year fixed hit the 8% mark, with only a handful of cash out refinances making sense for those in need of payment relief (on other debt).
But since then rate and term refinances have picked up tremendously as recent vintages of mortgages have fallen “into the money” for monthly payment savings.
As noted a week ago, rate and term refis surged 300% in August from a year earlier and the refinance share of total loan production rose to 26%, the highest figure since early 2022.
Chances are it will continue to grow into 2025 as mortgage rates are expected to ease further this year and next.
iEmergent said they “expect rates to finally start declining in the months ahead,” on top of the near-2% decline we’ve already seen.
While many have argued that the rate cuts are mostly baked into mortgage rates already, which explained mortgage rates rising after the Fed cut, there’s still a lot of economic uncertainty ahead.
The 50-basis point came as a surprise to many and another one could be on deck for November, currently holding a 60% probability per CME FedWatch.
If it turns out the Fed has gotten behind the eight ball, 10-year bond yields (which track mortgage rates) could drop more than is already penciled in.
At the same time, there’s still room for mortgage spreads to compress as the market normalizes and adjusts to the new lower rates (and higher loan volumes ahead).
2025 Refinance Volume Slated to Rise Another 38%
Looking forward to 2025, the refinance picture is expected to get even brighter, with such loans rising a further 38% (in dollar amount) from 2024.
This will likely continue to be driven by rate and term refis as interest rates continue to improve and the millions who took out loans since 2022 take advantage of cheaper rates.
But it could also come in the form of cash out refinances, which will become more attractive as well.
Even if an existing homeowner has a rate of say 4%, something in the high-5s or low 6% range could work if they need cash.
This could be a reflection of increasing debts in other departments, as pandemic-era savings run dry.
Ultimately, homeowners have barely touched their equity this housing cycle, so there’s an expectation that it’ll happen at some point, especially with home equity at record highs.
You might also see this in the form of second mortgage lending, with HELOC rates expected to fall another 2% as the prime rate is lowered by that same amount over the next 12 months.
Meanwhile, iEmergent is forecasting a paltry 6.5% increase in purchase volume in 2025, pushing overall dollar volume growth to just 13.3%
As for why purchase lending is projected to be relatively flat next year, it’s a wider economy story.
If economic growth continues to decelerate and a recession takes place, a weaker labor market with higher unemployment could dampen home buyer demand.
So even if mortgage rates decline more as a result, you’ve got fewer willing and able buyers, despite lower monthly payments.
This explains the phenomenon of how home prices and mortgage rates can fall in tandem.
They might not, but it at least debunks the idea of there being an inverse relationship between the two.
Long story short, 2025 should be better for mortgage originators thanks to refis, but don’t get your hopes up on purchase lending seeing a big jump thanks to lower rates.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 18 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on Twitter for hot takes.
The homebuying process can seem confusing and overwhelming, especially since there are so many moving parts to consider.
Making a down payment is just one part of the process. While it has long been a notion that you needed to put at least 20% down in order to buy a home, findings from a National Association of Realtors report indicate that the average down payment on a home or condo in 2021 was actually 12% — for homebuyers under the age of 30, the average down payment was just 6%.
It’s important to note that if you make a down payment of less than 20%, you’ll typically be charged Private Mortgage Insurance, or PMI, until you build 20% equity in the home. That said, making a lower down payment can present some advantages. For one, doing so allows you to reserve more of your savings upfront for closing costs, lender fees, renovations that may need to be done in the home and other moving expenses.
CNBC Select rounded up five mortgage lenders that do not require a large down payment, evaluating lenders based on the types of loans offered, customer support and minimum down payment amount, among other factors (see our methodology below.) As always, do your homework ahead of time so you can be sure you’re choosing the lender that best suits your needs, whether you’re a first-time homebuyer or purchasing an investment property.
Compare offers to find the best mortgage
The best small down payment mortgages
Best for flexible down payment options
Chase Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans
Terms
10 – 30 years
Credit needed
Minimum down payment
3% if moving forward with a DreaMaker℠ loan
Terms apply.
Offers first-time homebuyer assistance?
Pros
Chase DreaMaker℠ loan allows for a slightly smaller down payment at 3%
Discounts for existing Chase customers
Online support available
A number of resources available for first-time homebuyers including mortgage calculators, affordability calculator, education courses and Home Advisors
Cons
Doesn’t offer USDA loans or HELOCs
Who’s this for? Chase Bank offers down payment options as low as 3% if you apply for the DreaMaker home loan — for comparison, an FHA loan requires borrowers to make a 3.5% down payment.
While the DreaMaker loan is designed especially for those who can only afford to make a small down payment, it also comes with stricter income requirements compared to some of the other available loans. According to Chase, the annual income used to qualify customers must not exceed 80% of the Area Median Income, or AMI, for instance.
In addition to the DreaMaker loan, Chase also offers a conventional loan, FHA loan, VA loan and jumbo loan — USDA loans and home equity lines of credit, or HELOCs, are not offered by this lender. The VA loan requires a down payment minimum of 0%, which tends to be the standard rate for these types of loans. Much like other lenders, Chase has a minimum credit score requirement of 620 for its mortgage options.
Chase offers mortgage terms that range from 10 years to 30 years, as well as fixed rate and adjustable-rate mortgages, or ARM. Discounts are also offered for existing customers, although the requirements are rather high: To receive $500 off your mortgage processing fee, you’ll need to have $150,000 to $499,999 between Chase deposit accounts and Chase investment accounts, while having $500,000 or more in these accounts can result in up to $1,150 being taken off the processing fee.
Best for a VA loan
Navy Federal Credit Union
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans, adjustable-rate mortgage
Terms
10 – 30 years
Credit needed
Not disclosed but lender is flexible
Minimum down payment
0%; 5% for conventional loan option
Terms apply.
Pros
0% downpayment for most loan options
flexible repayment terms ranging from 10 years to 30 years
Offers refinancing, second-home financing and loans for investment properties
No PMI required
Fast pre-approval
RealtyPlus program allows applicants to receive up to $9,000 cash back
Cons
Must be a Navy Federal Credit Union member to apply
Who’s this for? Navy Federal Credit Union provides the most benefits to current or retired members of the Armed Forces who have signed up for a Navy Federal Credit Union membership (immediate family members are also eligible).
This lender offers VA loans with the option to pay 0% down and contribute up to 4% of the home’s value toward closing costs. Another option, the Military Choice mortgage, has similar guidelines to the VA loan, such as no PMI and a 0% minimum down payment, but allows sellers to contribute up to 6% of the home’s value toward closing costs.
Homebuyers can also use the RealtyPlus program to buy a home and receive up to $9,000 in cash back. Private mortgage insurance, or PMI, is also not a requirement for a low down payment on a mortgage through this particular lender.
While this lender doesn’t disclose its required minimum credit score, it does work with members to analyze their circumstances and find the right mortgage fit for them, making Navy Federal Credit Union a potentially more flexible lender if your credit score is on the lower side.
Best for no lender fees
Ally Home
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, HomeReady loan and Jumbo loans
Terms
15 – 30 years
Credit needed
Minimum down payment
3% if moving forward with a HomeReady loan
Terms apply.
Pros
No lender fees
Preapproval in as little as three minutes
Available in all 50 states
HomeReady loan only requires a 3% down payment
Cons
No FHA, USDA or VA loans
No home equity line of credit (HELOC) loans
No physical branches
Who’s this for? Ally Bank offers a HomeReady mortgage program that is geared toward low- to mid-income homebuyers regardless of whether it’s their first time or if they’re a repeat buyer, allowing you to put down as little as 3% for a down payment. Applicants must have a debt-to-income ratio of no more than 50%, their income must be equal to or less than 80% of the area’s median income and at least one borrower must take a homeowner education course.
It’s common for lenders to charge several fees during the mortgage application process, including an application fee, an origination fee, a processing fee and an underwriting fee, which can end up costing a significant amount during the homebuying process. While Ally doesn’t charge any of those fees, you may still have to deal with appraisal fees and recording fees, or pay for title searches and insurance.
It’s possible to get pre-approved for a loan in as little as three minutes online and submit your application in just 15 minutes, as long as you have all the necessary documents handy.
While Ally also offers a jumbo loan option, note that FHA loans, VA and USDA loans are not available through this lender. Customers can also choose between fixed rate and adjustable rate mortgages, and 15-year, 20-year and 30-year loan terms.
Best for specialized loan options
PNC Bank
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan
Terms
10 – 30 years
Credit needed
Minimum down payment
0% if moving forward with a USDA loan
Terms apply.
Pros
Offers a wide variety of loans to suit an array of customer needs
Available in all 50 states
Online and in-person service available
Cons
Doesn’t offer home renovation loans
Who’s this for? USDA loans allow homebuyers to make a 0% down payment to purchase their home. It’s sometimes tough to find lenders that offer these types of loans in addition to other standard mortgage options, but PNC Bank does include USDA loans in its lineup.
To apply for a USDA loan with PNC Bank, you must be purchasing a home in a qualifying rural area. If you’re not interested in a USDA loan, this particular lender also offers conventional loans, FHA loans, VA loans, jumbo loans and a PNC Bank Community Loan, a special program that allows homebuyers to put down as little as 3% (without paying private mortgage insurance) and choose between fixed-rate and adjustable-rate mortgage terms.
This lender also offers a special loan option geared toward medical professionals who are looking to buy a primary residence only. With this loan, medical professionals can apply for as much as $1 million and won’t have to pay private mortgage insurance regardless of their down payment amount. They can also choose between fixed-rate and adjustable-rate terms.
It’s possible to get online pre-approval in as little as 30 minutes as long as you have all the documentation available on hand.
Best for no PMI
Citibank Mortgage Account
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and Jumbo loans
Terms
15 – 30 years
Credit needed
Minimum down payment
Terms apply.
Pros
Citi’s HomeRun Mortgage program allows for a downpayment as low as 3%
Citi’s Lender Assistance program gives eligible homebuyers a credit of up to $5,000 to use toward closing costs
Ability to choose between fixed-rate and adjustable-rate mortgages
New and existing Citi bank customers can qualify for closing cost discounts based on their account balance
HomeRun mortgage program allows for a downpayment of less than 20% without PMI
Provides homeownership education and counseling
Cons
No options for a 0% downpayment
Existing customers need high account balances to receive some of the highest interest rate discounts
Who’s this for? Private Mortgage Insurance, or PMI, is typically a required monthly charge if you make a down payment of less than 20% for your home. While it can eventually be waived once you’ve made enough payments to build up 20% equity in your home, PMI can still easily eat into your monthly budget before that point.
Those who apply for a mortgage through Citi’s HomeRun program can make down payments as low as 3% without having to pay monthly PMI. HomeRun mortgages also allow you to lock in a fixed rate on your loan so you won’t have to worry about potentially being charged even more interest down the line. This mortgage option is also ideal for those who need to borrow up to $726,200 — or up to $1,089,300 if you reside in Hawaii or Alaska. If you’re looking for a jumbo loan, here are four mortgage lenders you should consider.
Aside from the HomeRun program, Citi also offers discounts for anyone interested in its other mortgage loans. Citi is currently offering a $500 credit toward your closing costs when you apply for a Citibank Mortgage Account.
FAQs
What is pre-approval and how does it work?
Pre-approval is a statement or letter from a lender that details how much money you can borrow to purchase a home and what your interest rate might be. To get pre-approved, you may have to provide bank statements, pay stubs, tax forms and employment verification, among other documents. Once you’re pre-approved, you’ll receive a mortgage pre-approval letter, which you can use to begin viewing homes and making offers. It’s best to get pre-approved at the start of your home-buying journey before you start looking at homes.
How do mortgages work?
A mortgage is a type of loan you can use to purchase a home. It’s also an agreement between you and the lender that essentially says you can purchase a home without paying for it in-full upfront — you’ll just put some of the money as a down payment upfront (usually between 3% and 20% of the home price) and pay smaller, fixed equal monthly payments for a certain number of years plus interest.
For example, you probably don’t want to pay $400,000 for a home upfront, however, maybe you can afford to pay $30,000 upfront. A mortgage would allow you to make that $30,000 payment — a lender would provide you with a loan for the remaining amount of $370,000 and you’d agree to repay it plus interest to the lender over the course of 15 or 30 years.
Keep in mind that if you choose to put down less than 20%, you’ll be subject to private mortgage insurance, or PMI, payments in addition to your monthly mortgage payments. However, you can usually have the PMI waived after you’ve made enough payments to build 20% equity in your home.
What is a conventional loan?
Conventional loans are funded by private lenders and sold to government enterprises such as Fannie Mae and Freddie Mac. It’s the most common type of loan and some lenders may require a down payment as low as 3% or 5%.
What is an FHA loan?
Federal Housing Administration loans, or FHA loans, typically allow you to purchase a home with looser requirements. For example, this type of loan might let you get approved with a lower credit score and applicants may be able to get away with having a higher debt-to-income ratio. You typically only need to make a 3.5% down payment with an FHA loan.
What is a USDA loan?
USDA loans are offered through the United States Department of Agriculture and are aimed at individuals who want to purchase a home in a rural area. A USDA loan requires a minimum down payment of 0% — in other words, you can use it to buy a rural home without making a down payment.
What is a VA loan?
VA mortgage loans are provided through the U.S. Department of Veterans Affairs and are meant for service members, veterans and their spouses. They require a 0% down payment and no additional private mortgage insurance.
What is a jumbo loan?
How is my mortgage rate decided?
Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn’t set mortgage rates, they tend to move in reaction to actions taken by the Federal Reserve on its interest rates.
While market forces may influence the general range of mortgage rates, your specific mortgage rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.
What is the difference between a 15-year and a 30-year term?
A 15-year mortgage gives homeowners 15 years to pay off their mortgage in fixed, equal amounts plus interest. By contrast, a 30-year mortgage gives homeowners 30 years to pay off their mortgage. With a 30-year mortgage, your monthly payments will be lower since you’ll have a longer period of time to pay off the loan. That said, you’ll wind up paying more in interest over the life of the loan since interest is charged monthly. A 15-year mortgage lets you save on interest but you’ll likely have a higher monthly payment.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage lender review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of home loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best small down payment mortgages.
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Our methodology
To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best mortgages, we focused on the following features:
Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does.
Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.
After reviewing the above features, we sorted our recommendations by best for overall financing needs, quick closing timeline, lower interest rates and flexible terms.
Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Federal Reserve rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
The home-buying process can be especially nerve-wracking if you’re worried about having less-than-ideal credit. Luckily, some lenders will consider applicants with bad credit — or no credit at all.
CNBC Select rounded up the top lenders that consider applicants with credit scores lower than the typical 620 requirement. We evaluated each based on the types of loans offered, customer support, the required minimum down payment amount, and other factors (see our methodology below).
Keep in mind that while you may be approved for a mortgage with a lower credit score, you’ll likely receive an interest rate on the higher end of the lender’s rate range.
Best mortgage lenders for bad credit
Best for flexible terms
Rocket Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and jumbo loans
Terms
15- and 30-year conventional loans, 30-year VA and FHA loans, custom mortgages with fixed-rate terms from 8 to 29 years.
Credit needed
Typically requires a 620 credit score but will consider applicants with a 580 as long as other eligibility criteria are met.
Minimum down payment
3.5% if moving forward with an FHA loan
Already have a mortgage through Rocket Mortgage or looking to start one? Check out the Rocket Visa Signature Card to learn how you can earn rewards
Pros
Largest home lender in the U.S.
Offers 1% down conventional mortgage
High scores for customer satisfaction
Shorter-than-average closing time
Rebate of up to $10,000 for buying with Rocket Homes
Cons
No USDA mortgages, construction loans or HELOCs
Hard credit check required for customized rate
Higher origination fees than competition
No retail branches
Who’s this for? Rocket Mortgage stands out if you’re seeking flexibility. While most lenders tend to require a minimum credit score of 620, Rocket Mortgage accepts applicants with credit scores as low as 580.
Standout benefits: Rocket Mortgage offers a free program called Fresh Start to help potential applicants boost their credit scores before applying. Its proprietary low down payment option, the ONE+ mortgage, allows borrowers to put as little as 1% down.
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Best for veterans
Navy Federal Credit Union
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans, adjustable-rate mortgage
Terms
10 – 30 years
Credit needed
Not disclosed but lender is flexible
Minimum down payment
0%; 5% for conventional loan option
Terms apply.
Pros
0% downpayment for most loan options
flexible repayment terms ranging from 10 years to 30 years
Offers refinancing, second-home financing and loans for investment properties
No PMI required
Fast pre-approval
RealtyPlus program allows applicants to receive up to $9,000 cash back
Cons
Must be a Navy Federal Credit Union member to apply
Who’s this for? Navy Federal Credit Union is ideal for current or retired members of the Armed Forces with a Navy Federal Credit Union membership (immediate family members are also eligible). While this lender doesn’t disclose its required minimum credit score, it works with members to analyze their circumstances and find the right mortgage fit for them, making Navy Federal Credit Union a potentially more flexible lender if you have a lower credit score.
Standout benefits: You can use the RealtyPlus program to buy a home and receive up to $9,000 in cash back. Private mortgage insurance (PMI), is also not a requirement for a low down payment on a mortgage through this lender.
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Best for no PMI
CitiMortgage®
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and Jumbo loans
Terms
15 – 30 years
Credit needed
Minimum down payment
Terms apply.
Pros
Citi’s HomeRun Mortgage program allows for a downpayment as low as 3%
Citi’s Lender Assistance program gives eligible homebuyers a credit of up to $5,000 to use toward closing costs
Ability to choose between fixed-rate and adjustable-rate mortgages
New and existing Citi bank customers can qualify for closing cost discounts based on their account balance
HomeRun mortgage program allows for a downpayment of less than 20% without PMI
Provides homeownership education and counseling
Cons
No options for a 0% downpayment
Existing customers need high account balances to receive some of the highest interest rate discounts
Who’s this for? CitiMortgage is great if you want to put less than 20% down but avoid the monthly PMI bill. If you apply for a mortgage through Citi’s HomeRun program, you can make down payments as low as 3% without PMI. If you’ve already purchased your home, this program can also be used to refinance your mortgage.
Standout benefits: Existing Citi customers with an account balance between $1 and $49,999.99 can be eligible for a $500 closing credit. Those with higher balances can receive an interest rate discount. Qualified borrowers can use the Lender Paid Assistance program to get up to $7,500 in credits toward closing costs. Homeownership counseling and education are also available.
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Best for no credit score requirement
Guild Mortgage
Annual Percentage Rate (APR)
Fixed-rate and adjustable-rate available, apply online for rates.
Types of loans
Conventional loans, construction loans, FHA loans, VA loans, USDA loans and Jumbo loans
Terms
15-year to 30-year
Credit needed
Some loans require a 620 credit score, some require a 540 credit score or no credit score at all.
Minimum down payment
0% if moving forward with a USDA loan; 0% if moving forward with an Arrive Home™ or Zero Down mortgage (a 3% to 5% down payment is financed through a second mortgage with these options) ; 1% on conventional loans for some qualifying borrowers
Pros
Offers several low down payment mortgage options available
Wide variety of loans
Accepts applicants with credit as low as 540 or no credit at all with some loans
Provides lots of information online about the homebuying process
Robust brick-and-mortar and online presence
Cons
Rates are not available to view on the website
Mortgages may not be available for every home type
Who’s this for? Guild Mortgage can provide options even if you don’t have a credit score or have a score as low as 540 — a lower threshold than the typical 620 credit score lenders usually require to even look at an applicant. Instead, Guild uses proof of on-time payments such as rent checks, utility bills and insurance payments to verify an applicant’s credit. It also boasts a variety of loans and down payment assistance programs if you want to make a small down payment.
Standout benefits: Guild Mortgage’s Zero Down allows borrowers with a credit score of 600 or greater to take out an FHA loan with 0% down — the lender will provide an additional repayable loan to the borrower as a second mortgage to supplement the FHA’s traditional 3.5% down payment requirement. Qualifying borrowers who make up to 160% of the area median income can also take out Guild Mortgage’s Arrive Home™ loan, which allows borrowers to put 0% down by taking out a repayable second mortgage with the company.
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Best for a quick closing
CrossCountry Mortgage
Annual Percentage Rate (APR)
Fixed-rate and adjustable-rate available, apply online for rates.
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans
Terms
Apply online for terms
Credit needed
620 for conventional loans, 500 to 580 for some government-insured loans
Minimum down payment
Pros
Provides down payment grants
FastTrack Credit Approval program allows some borrowers to close on mortgage within 10 days
Website provides a variety of tools, including a mortgage calculator, homebuying guide, and refinancing guide
Available in all 50 states
Cons
Higher-than-average rates
Rates are not online
Who’s this for? CrossCountry Mortgage is great if you want a lender with faster-than-average closing times. It offers conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans. While most of its conventional loans require a 620 credit score, some federally insured options accept borrowers with a credit score as low as 500.
Standout benefits: CrossCountry Mortgage offers down payment grants for qualified buyers. With its FastTrack Credit Approval, CrossCountry says its borrowers have an edge in the home buying process with a reapproval process that allows borrowers to get the funds in as little as 10 days.
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More on our top lenders for those with bad credit
Rocket Mortgage
Rocket Mortgage — the largest home loan provider in the country — has a variety of loan options available — especially for those looking to make a small down payment. It accepts borrowers with credit scores as low as 580 and provides a large number of educational resources on its easy-to-use website. Rocket has consistently scored above average on customer satisfaction surveys.
Minimum credit score
580
Types of mortgage loans offered
Fixed-rate, adjustable-rate, FHA loans, VA loans, jumbo loans, HomeReady and Home Possible loans
Down payment minimum
1% with the ONE+; 3.5% with FHA loan
[ Return to summary ]
Navy Federal Credit Union
Navy Federal Credit Union is the largest provider of VA loans and provides many benefits to veterans, and their immediate families. With a VA loan, you have the option to pay 0% down and the seller can contribute up to 4% of the home’s value toward closing costs. Navy Federal also offers the Military Choice mortgage, which has similar guidelines to the VA loan, such as no PMI and a 0% minimum down payment, but allows sellers to contribute up to 6% of the home’s value toward closing costs.
Minimum credit score
Not disclosed.
Types of mortgage loans offered
Conventional loans, VA loans, Military Choice loans, Homebuyers Choice loans
Down payment minimum
0%; 5% with conventional loans
[ Return to summary ]
CitiMortgage
CitiMortgage allows homebuyers to make a small down payment without worrying about PMI. Citi offers qualifying existing customers closing cost aid or interest rate discounts.
Minimum credit score
580 if taking out an FHA loan.
Types of mortgage loans offered
Conventional loans, FHA loans, VA loans and jumbo loans
Down payment minimum
3%
[ Return to summary ]
Guild Mortgage
Guild Mortgage provides many loan types for borrowers with much lower credit than lenders usually require. In some cases, a credit score is not even needed. Guild also provides several low down payment options.
Minimum credit score
540 for some mortgages; no credit needed for some mortgages
Types of mortgage loans offered
Conventional loans, construction loans, FHA loans, VA loans, USDA loans and Jumbo loans
Down payment minimum
0% with a down payment assistance loan as a second mortgage.
[ Return to summary ]
CrossCountry Mortgage
CrossCountry Mortgage offers a wide variety of loans and says it can give its borrowers a leg up in the homebuying process through its FastTrack Credit Approval which allows borrowers to close on a loan in as little as 10 days.
Minimum credit score
580 or 500 for some government-insured loans.
Types of mortgage loans offered
Conventional loans, FHA loans, VA loans, USDA loans, Jumbo loans, manufactured home loans
Down payment minimum
3%
[ Return to summary ]
FAQs
What is pre-approval and how does it work?
Pre-approval is a statement or letter from a lender indicating how much money you qualify to borrow to purchase a home and your potential interest rate. You’ll likely have to provide bank statements, pay stubs, tax forms and employment verification, among other requirements, and once pre-approved, you’ll receive a mortgage pre-approval letter, which you can use to begin viewing homes and making offers. It’s best to get pre-approved at the start of your homebuying journey before you start looking at homes.
How do mortgages work?
A mortgage is a loan you can use to purchase a home. It’s also an agreement between you and the lender that essentially says you can purchase a home without paying for it in full and upfront — you’ll just need to put some of the money down — usually between 3% and 20% of the home price — and pay smaller, fixed monthly payments over a certain number of years, plus interest.
How is my mortgage rate decided?
Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn’t set mortgage rates, they do tend to move in reaction to actions taken by the Federal Reserve on its interest rates.
While market forces may influence the general range of mortgage rates, your specific rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.
What is a conventional loan?
A conventional loan is a loan that’s funded by private lenders and sold to government enterprises such as Fannie Mae and Freddie Mac. It’s the most common type of loan and some lenders may require a down payment as low as 3% or 5%.
What is an FHA loan?
A Federal Housing Administration loan, or FHA loan, typically allows you to purchase a home with looser requirements — for example, you may get approved with a lower credit score or be able to get away with having a higher debt-to-income ratio. You’ll typically only need to make a 3.5% down payment.
What is a USDA loan?
A USDA loan is offered through the United States Department of Agriculture and is aimed at individuals who want to purchase a home in a rural area. Best of all, USDA loans require a minimum down payment of 0% — in other words, you can use it to buy a rural home without a down payment.
What is a VA loan?
VA mortgage loans are provided through the U.S. Department of Veterans Affairs, meant for service members, veterans and their spouses and require a 0% down payment with no mortgage insurance.
What is a jumbo loan?
Borrowers who need a mortgage for more than $766,550 to purchase a single-family home (in most areas) will need to take out a jumbo loan. Note that these types of loans typically have stricter credit score and debt-to-income ratio requirements in part because they do not meet the Federal Housing Finance Agency’s (FHFA) conforming guidelines.
What is the difference between a 15- and 30-year term?
A 15-year mortgage gives homeowners 15 years to pay it off in fixed, equal amounts plus interest, while a 30-year mortgage gives 30 years to pay it off. With a 30-year mortgage, your monthly payments will be lower since you’ll have a longer period to pay off the loan, however, you’ll wind up paying more in interest over the life of the loan since it is charged every month. A 15-year mortgage, on the other hand, lets you save on interest but you’ll likely have to make a higher monthly payment.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of mortgage products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best bad credit mortgages.
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Our methodology
To determine which mortgage lenders are the best for bad credit, CNBC Select analyzed dozens of U.S. mortgages offered by online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best mortgages, we focused on the following features:
Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender can cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
Closing timeline: The lenders on our list can offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances in which a particular lender does.
Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.
Note that the rates and fee structures advertised for mortgages are subject to fluctuate per the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee the interest rate and monthly payment remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Average mortgage rates edged a little higher last Friday. But that didn’t spoil a good week during which those rates tumbled overall.
Earlier this morning, markets were signaling that mortgage rates today might increase. But these early mini-trends often alter speed or switch direction as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 15-year fixed
6.445%
6.524%
+0.01
30-year fixed VA
6.962%
7.008%
+0.28
Conventional 30-year fixed
7.007%
7.057%
+0.01
Conventional 20-year fixed
6.774%
6.829%
+0.08
Conventional 10-year fixed
6.377%
6.455%
+0.03
5/1 ARM Conventional
6.612%
7.913%
-0.03
30-year fixed FHA
6.907%
6.953%
+0.2
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
Don’t be fooled by recent falls in mortgage rates. It may feel as if those rates have been falling more than rising, not least because they have since mid-April. But there was a sharp rise immediately before the subsequent fall. And, if you go back three months, mortgage rates were lower then than they are now.
Looking across the longer term, mortgage rates remain on an upward trajectory. But, this year, they’ve effectively been moving sideways so perhaps the upward trend is moderating or plateauing.
What we’re not seeing yet are sustained falls. And I judge the chances of falls and rises at roughly 50-50. Would you want to bet on those odds? I wouldn’t.
So, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
Of course, don’t lock your rate when mortgage rates look likely to fall. My recommendations are based on longer trends. And, within those, there will be rate-friendly days and longer periods that you can take advantage of.
With so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes climbed to 4.29% from 4.22%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were falling this morning. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices ticked down to $79.05 from $79.07 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices decreased to $2,337 from $2,346 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — inched down to 38 from 40 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to rise. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
This week
Seven senior Federal Reserve officials have speaking engagements today and tomorrow. And they may try to correct any misapprehensions markets still have following last Wednesday’s Fed events.
The Fed made it pretty clear then that it expected to make only one cut to general interest rates during 2024. But markets are already second-guessing that, with the CME Group finding investors reckon there’s a 70% chance of two such cuts.
That explains markets’ muted reaction to last week’s pronouncements by the Fed. They simply didn’t believe the central bank’s message.
Investors have a pretty patchy record for second-guessing the Fed. But they’re sometimes correct. If they’re right this time, that could be good for mortgage rates. But, if the Fed sticks to its guns, that could be bad for them.
Today
This morning’s lone economic report is the June Empire State manufacturing survey. I don’t remember the last time that affected mortgage rates so we shouldn’t lose any sleep over it.
There is some economic news around that could influence markets. China’s growth is slowing and its property market is in trouble. And the French snap parliamentary election is freaking out some investors as the possibility of a hard-right party taking power is regarded as economically undesirable.
But the Chinese and French news would normally be helpful to mortgage rates. So, why were those rates rising overnight?
Well, it may be that investors are jittery over tomorrow’s economic data.
Tomorrow
Tomorrow morning, we’re due May data on:
Retail sales — Markets expect sales to edge up by 0.2% from April’s 0.0%
Industrial production and capacity utilization — Markets expect industrial production also to nudge up to 0.4% from April’s 0.0%. And capacity utilization, too, is expected to improve: to 78.6% from 78.4%
So, markets are expecting those numbers to show improvements, which would normally be bad for mortgage rates. But, luckily, those expectations are already baked into mortgage rates. And it’s the gap between those and tomorrow’s actual numbers that could create volatility.
For the best chance of mortgage rates falling, we’d like to see smaller numbers than markets are expecting. Bigger ones could push those rates upward.
The rest of the week
Bond markets are closed on Wednesday for the Juneteenth holiday. So, mortgage rates shouldn’t move that day, and my daily report won’t appear.
I’ll brief you on Thursday and Friday’s economic reports that might move mortgage rates on the day before each appears. But most on the calendar rarely affect those rates.
If you’re hungry for more information about what’s moving mortgage rates, do click through to the latest weekend edition of this daily report. It provides a deeper analysis together with a preview of what to expect in the coming week. It’s published each Saturday morning soon after 10 a.m. Eastern.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Jun. 13 report put that same weekly average at 6.95%, down from the previous week’s 6.99%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures. Still, they’re a good way to track trends.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the last three quarters of 2024 and the first quarter of 2025 (Q2/24, Q3/24 Q4/24 and Q1/25).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on May 22 and the MBA’s on May 17.
Forecaster
Q2/24
Q3/24
Q4/24
Q1/25
Fannie Mae
7.1%
7.1%
7.0%
6.9%
MBA
6.9%
6.7%
6.5%
6.4%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Average mortgage rates climbed appreciably last Friday following a surprisingly (if not shockingly) strong jobs report. That day’s rise all but wiped out the falls earlier in the week, sending those rates to their highest level so far this month.
First thing, it was looking as if mortgage rates today might barely budge. But that could change later in the day.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 15-year fixed
6.565%
6.645%
+0.03
Conventional 30-year fixed
7.05%
7.1%
+0.02
30-year fixed FHA
7.009%
7.052%
+0.26
Conventional 10-year fixed
6.632%
6.713%
+0.02
Conventional 20-year fixed
6.88%
6.935%
+0.06
5/1 ARM Conventional
6.734%
7.896%
-0.03
30-year fixed VA
7.083%
7.126%
+0.24
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
I’m truly sorry that my predictions last week of higher mortgage rates imminently turned out to be correct. But my feeling is that markets aren’t ready to deliver a consistent downward trend for those rates and probably won’t be ready to do so until much later in the year. And possibly not even then.
In the meantime, of course, there will be periods of falls as well as rises. And, over time, we can reasonably hope they’ll roughly balance each other out.
I don’t see any point in betting (by floating your rate) when the chances of wining and losing are approximately equal.
So, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
Of course, don’t lock your rate when mortgage rates look likely to fall. My recommendations are based on longer trends. And, within those, there will be rate-friendly days and longer periods that you can take advantage of.
With so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes edged up to 4.46% from 4.43%. (Bad for mortgage rates) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were falling this morning. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices rose to $75.97 from $75.76 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices fell to $2,321 from $2,338 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — Edged down to 42 from 44 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to hardly move. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Super Wednesday looms
Two of the three events that are most likely to move mortgage rates are due this Wednesday. They’re:
The monthly consumer price index — A crucial inflation report
A six-weekly update from the Federal Reserve on how its plans for future cuts to general interest are evolving. This time, it could be particularly influential because it includes a quarterly Summary of Economic Projections, complete with a highly valued dot plot, as well as a news conference
I’ll brief you tomorrow on what to expect from those. Or, if you’re in a hurry, check out the weekend edition (link below). But they’d need to be exceptionally friendly toward mortgage rates to fully counteract the effects of last Friday’s jobs report.
Today and tomorrow
No economic reports are due today. So any significant change in mortgage rates is likely to be a result of either continuing momentum from last Friday or some unscheduled news story that affects the economy.
Tomorrow may be similarly uneventful. The only report due is an optimism index from the National Federation of Independent Business, and that rarely affects mortgage rates.
Later in the week
We’re due the producer price index (PPI) on Thursday and the import price index (IPI) on Friday. These forward-looking inflation indicators can sometimes affect mortgage rates but usually only temporarily and in a limited way.
And the same goes for two other reports:
Weekly initial jobless claims on Thursday
The consumer sentiment index on Friday
Indeed, I suspect all reports this week will be eclipsed by Wednesday’s events.
If you’re hungry for more information about what’s moving mortgage rates, do click through to the latest weekend edition of this daily report. It provides a deeper analysis together with a preview of what to expect in the coming week. It’s published each Saturday morning soon after 10 a.m. Eastern.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Jun. 6 report put that same weekly average at 6.99%, down from the previous week’s 7.03%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures. Still, they’re a good way to track trends.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the last three quarters of 2024 and the first quarter of 2025 (Q2/24, Q3/24 Q4/24 and Q1/25).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on May 22 and the MBA’s on May 17.
Forecaster
Q2/24
Q3/24
Q4/24
Q1/25
Fannie Mae
7.1%
7.1%
7.0%
6.9%
MBA
6.9%
6.7%
6.5%
6.4%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Initial jobless claims dropped by 10,000 in the week ending May 11, according to the latest data from the U.S. Department of Labor.
In the prior week, the Department of Labor reported that initial jobless claims had jumped to an eight-month high — reportedly due to a spike in claims in New York during that week stemming from spring breaks across schools. During public school breaks some workers, like bus drivers and cafeteria workers, can apply for unemployment benefits.
The weekly jobless claims, or initial claims, are the number of unemployment insurance claims filed in the past week. They provide an indicator of the strength — or weakness — of the labor market. Claims remained steady throughout 2023, but recent data shows some of the lowest levels of initial claims since September 2022.
Jobless claims declined to 222,000 for the week ending May 11, according to the report released on May 16. Last week’s level was revised up to 232,000. The claims came in above what economists had estimated (220,000).
The new four-week moving average — a measurement of the number of people who filed for unemployment insurance for the first time over the last four weeks — was 217,750, which is 2,500 higher than the previous week’s average of 215,250.
What’s the insured unemployment rate?
Not all types of unemployment are included as part of the insured unemployment rate. It only includes “covered unemployment,” as in people who receive unemployment benefits. Those who quit their jobs, for example, aren’t included in the insured unemployment rate because they aren’t eligible for unemployment benefits.
The advance seasonally adjusted insured unemployment rate — the rate of continuous covered unemployment claims divided by covered employment — was 1.2% for the week ending May 4. The rate is unchanged from the unrevised rate for the previous week.
How are state labor markets doing?
States with the highest insured unemployment rates, week ending April 27:
New Jersey: 2.4%
California: 2.3%
Massachusetts: 1.8%
Rhode Island: 1.8%
Illinois: 1.7%
New York: 1.7%
Alaska: 1.6%
Nevada: 1.6%
Washington: 1.6%
Connecticut: 1.5%
Minnesota: 1.5%
States with the largest increases in initial jobless claims, week ending May 4:
New York: +10,171
California: +3,595
Indiana: +2,367
Illinois: +1,836
Texas: +1,253
States with the largest decreases in initial jobless claims, week ending May 4:
Iowa: -1,177
New Hampshire: -435
Connecticut: -334
Louisiana: -213
Kentucky: -208
(Photo by Mario Tama/Getty Images News via Getty Images)
Video above: What does it take to be “middle class” in America
(NEXSTAR) – Despite persistently-high mortgage rates, home prices in U.S. metro areas continue to rise in 2024, new data shows.
Over 90% of metro markets have seen gains in the first quarter of the year, according to the National Association of Realtors, with Illinois taking six of the top 10 spots. The highest year-over-year jump was in Fond du Lac, Wis. (23.7%), with Kankakee, Ill. (22%); Rockford, Ill. (20.1%); Champaign-Urbana, Ill. (20%); and Johnson City, Tenn. (19.3%) rounding out the top five.
Illinois low-income utility assistance programs may get renewed due to bill
The spike in prices in those areas happened as the 30-year fixed mortgage rate ranged from 6.60% to nearly 7%, data from the Federal Reserve Bank of St. Louis shows.
“Astonishingly, greater than 90% of the country’s metro areas experienced home price growth despite facing the highest mortgage rates in two decades,” said NAR Chief Economist Lawrence Yun. “In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”
In February, 2024 a Zillow report found that the U.S. now has 550 “million-dollar” cities where the average home value is at least $1,000,000. That’s up from 491 at the same time in 2023.
Looking at metropolitan areas – which can include several cities – we see some regions jumping 20% or more year-over-year.
Rank
Metro Area
YOY Increase
1.
Fond du Lac, Wis.
23.7%
2.
Kankakee, Ill.
22.0%
3.
Rockford, Ill.
20.1%
4.
Champaign-Urbana, Ill.
20.0%
5.
Johnson City, Tenn.
19.3%
6.
Racine, Wis.
19.0%
7.
Newark, N.J.-Pa.
18.8%
8.
Bloomington, Ill.
18.5%
9.
New York-Jersey City-White Plains, N.Y.-N.J.
18.4%
10.
Cumberland, Md.-W.Va.
18.2%
(NAR)
When it comes to the overall home price, California markets made up eight of the top 10 most expensive, led by San Jose-Sunnyvale-Santa Clara, Calif. ($1,840,000; 13.7%), Anaheim-Santa Ana-Irvine, Calif. ($1,365,000; 14.2%) and San Francisco-Oakland-Hayward, Calif. ($1,300,000; 14%).
“The expensive markets in the West, where home prices declined last year, are roaring back,” Yun said. “Price dips in that region were viewed as second-chance opportunities by many buyers.”
The two non-California markets in the top 10 were Urban Honolulu, Hawaii ($1,085,800; 5.5%); and Naples-Immokalee-Marco Island, Fla. ($850,000; 9.4%).
Average mortgage rates inched lower yesterday. But all that did was wipe out last Friday’s similarly tiny rise.
Earlier this morning, markets were signaling that mortgage rates today might barely budge. However, these early mini-trends often alter direction or speed as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.302%
7.353%
+0.01
Conventional 15-year fixed
6.757%
6.836%
+0.01
30-year fixed FHA
7.064%
7.111%
-0.07
5/1 ARM Conventional
6.888%
8.036%
+0.12
Conventional 20-year fixed
7.199%
7.257%
+0.05
Conventional 10-year fixed
6.663%
6.737%
+0.06
30-year fixed VA
7.292%
7.332%
+0.01
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
This morning’s Financial Times reports, “While the base case remains a reduction in borrowing costs, the options market shows a 20% probability of an increase.” That means most investors think the Federal Reserve will cut general interest rates this year, but they reckon there’s a 20% chance of the central bank actually hiking them. That’s new and scary.
Although the Fed doesn’t directly determine mortgage rates it has a huge influence on the bond market that does. And I very much doubt mortgage rates will fall consistently before the Fed signals that a cut in general interest rates is imminent. And a Fed rate hike is likely to send mortgage rates much higher: maybe back up to 8% or beyond.
So my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes edged down to 4.6% from 4.64%. (Good for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were rising this morning. (Bad for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices decreased to $81.59 from $82.06 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices fell to $2,333 from $2,350 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — climbed to 40 from 33 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to be unchanged or close to unchanged. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Today
This morning’s two April purchasing managers’ indexes (PMIs) will likely be good for mortgage rates. These “flashes” (initial readings and subject to revision) are both from S&P.
Here are this morning’s actual numbers in bold, alongside the prepublication consensus forecasts, according to MarketWatch, together with the March actual figures:
Services PMI — 50.9 actual; 52 expected; 51.7 in March
Manufacturing PMI — 51.1 actual; 52 expected; 51.9 in March
You can see that the PMIs were worse than expected, which is typically good news for mortgage rates.
Tomorrow
Tomorrow’s durable goods orders for March rarely affect mortgage rates. And they’d need to contain some pretty shocking data to do so tomorrow.
Markets are expecting those orders to have risen by 2.6% in March compared to a 1.3% increase in February. They’ll probably need to be significantly higher than 2.% to exert upward pressure on mortgage rates and appreciably lower to push them downward.
The rest of this week
Nothing has changed since yesterday concerning economic reports due on Thursday and Friday. So, I’ll repeat what I wrote yesterday:
We’re due the first reading of gross domestic product (GDP) for the January-March quarter on Thursday. And that could have a larger effect than PMIs and durable goods orders, depending on the gap between expectations and actuals.
But Friday’s personal consumption expenditures (PCE) price index for March is this week’s star report. That’s the Federal Reserve’s favorite gauge of inflation. And it could certainly affect mortgage rates, possibly appreciably.
The next meeting of the Fed’s rate-setting committee is scheduled to start on Apr. 30 and last two days. So, the PCE price index will be the last inflation report it sees before making decisions.
And index that shows inflation cooling could change the mood at that meeting. True, it’s vanishingly unlikely that a cut to general interest rates will be unveiled on May 1 no matter what.
But a PCE price index that shows inflation cooling could help the Fed to move forward with cuts earlier than expected, which should cause mortgage rates to fall. Unfortunately, one that suggests inflation remains hot or is getting hotter could send those rates higher.
I’ll brief you more fully on each potentially significant report on the day before it’s published.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Apr. 18 report put that same weekly average at 7.1%, up from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Mar. 19 and the MBA’s on Apr. 18.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.7%
6.7%
6.6%
6.4%
MBA
6.8%
6.7%
6.6%
6.4%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Average mortgage rates rose very slightly yesterday. I’m afraid it’s a sign that Wednesday’s moderate fall wasn’t necessarily the start of much happier times.
Earlier this morning, markets were signaling that mortgage rates today could barely budge. However, these early mini-trends frequently alter direction or speed as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.29%
7.34%
+0.03
Conventional 15-year fixed
6.744%
6.822%
+0.04
30-year fixed FHA
7.129%
7.179%
+0.21
5/1 ARM Conventional
6.682%
7.918%
-0.01
Conventional 20-year fixed
7.15%
7.207%
+0.07
Conventional 10-year fixed
6.607%
6.68%
+0.02
30-year fixed VA
7.28%
7.324%
+0.2
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
I reckon it’s likely to be some months before we begin to see consistently falling mortgage rates. The economy is currently too robust and inflation is too warm for a sustained downward trend. And there are few signs of that changing until the summer or fall — or perhaps even later.
So my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes ticked lower to 4.62 from 4.63%. (Good for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were mixed this morning. (Neutral for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices decreased to $82.77 from $82.98 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices rose to $2,398 from $2,393 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — nudged down to 32 from 35 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to be unchanged or close to unchanged. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Today
There are no economic reports scheduled for release today. And the words of the sole senior Federal Reserve official with a speaking engagement, Chicago Fed President Austan Goolsbee, are unlikely to affect markets. His boss, Fed Chair Jerome Powell, laid out the central bank’s position on future cuts to general interest rates as recently as Tuesday.
Of course, mortgage rates can still move on days like today. But they’re generally driven by market sentiment or occasionally by important news that affects the economy.
Next week
Next Monday is much like today: zero economic reports on the schedule. Tuesday’s purchasing managers’ indexes (PMIs) could produce some movement in mortgage rates. But that’s typically limited and temporary, a description that applies to Wednesday’s durable goods orders data, too.
Things could warm up next Thursday when the first reading of gross domestic product (GDP) for the January-March quarter is due.
And next Friday should bring the March personal consumption expenditures (PCE) price index. That’s the Federal Reserve’s favorite gauge of inflation. So, it can certainly affect mortgage rates.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Apr. 18 report put that same weekly average at 7.1%, up from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Mar. 19 and the MBA’s on Apr. 18.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.7%
6.7%
6.6%
6.4%
MBA
6.8%
6.7%
6.6%
6.4%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Daily average mortgage rates jumped to their highest level since last November after last week’s disappointing inflation report
SEATTLE, April 18, 2024–(BUSINESS WIRE)–(NASDAQ: RDFN) —The median U.S. home-sale price increased 5% from a year earlier during the four weeks ending April 14, bringing it to $380,250—just $3,095 shy of June 2022’s all-time high. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The average daily mortgage rate this week surpassed 7.4%, the highest level since last November, after a hotter-than-expected inflation report and the Fed’s confirmation that interest-rate cuts will be delayed. The combination of high mortgage rates and prices have brought homebuyers’ median monthly housing payment to a record $2,775, up 11% year over year.
There are signals that buyers are out there touring homes despite rising rates. Mortgage-purchase applications are up 5% week over week, and Redfin’s Homebuyer Demand Index—a measure of requests for tours and other buying services from Redfin agents—is near its highest level in seven months. Chen Zhao, Redfin’s economic research lead, said some house hunters are hoping to buy now because they’re concerned rates could rise more, and others have grown accustomed to elevated rates and pushed down their home-price budget accordingly.
“Home sales are slower than usual, but there are still people buying and selling because if not now, when?” said Connie Durnal, a Redfin Premier agent in Dallas. “I’ve had a few prospective buyers touring homes for the last several years, since mortgage rates started going up, and they wish they would have bought last year because prices and rates are even higher now. My advice to them: If you can afford to and you find a house you love, buy now. There’s no guarantee that rates will come down soon.”
For more of Redfin economists’ takes on the housing market, including how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and activity
Value (if applicable)
Recent change
Year-over-year change
Source
Daily average 30-year fixed mortgage rate
7.41% (April 17)
Up from 7% one month earlier; highest level since November 2023
Increased 5% from a week earlier (as of week ending April 12)
Down 10%
Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)
Up 8% from a month earlier (as of week ending April 14)
Down 11%
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity
Up 33% from the start of the year (as of April 14)
At this time last year, it was up 23% from the start of 2023
ShowingTime, a home touring technology company
Google searches for “home for sale”
Unchanged from a month earlier (as of April 14)
Down 17%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending April 14, 2024
Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
Four weeks ending April 14, 2024
Year-over-year change
Notes
Median sale price
$380,250
4.7%
Median asking price
$413,225
6.4%
Biggest increase since Oct. 2022; all-time high
Median monthly mortgage payment
$2,775 at a 6.88% mortgage rate
10.6%
All-time high
Pending sales
86,086
-2.3%
New listings
93,332
10.8%
Active listings
832,748
9.6%
Months of supply
3.3 months
+0.4 pts.
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks
42.6%
Down from 44%
Median days on market
35
-1 day
Share of homes sold above list price
29.2%
Essentially unchanged
Share of homes with a price drop
5.9%
+1.6 pts.
Average sale-to-list price ratio
99.2%
+0.2 pts.
Metro-level highlights: Four weeks ending April 14, 2024
Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
Metros with biggest year-over-year increases
Metros with biggest year-over-year decreases
Notes
Median sale price
Anaheim, CA (24.8%)
Providence, RI (14.6%)
Nassau County, NY (14.3%)
West Palm Beach, FL (13.5%)
New Brunswick, NJ (13.1%)
San Antonio, TX (-1%)
Declined in just 1 metro
Pending sales
San Jose, CA (25.6%)
San Francisco (11.2%)
Oakland, CA (7.1%)
Columbus, OH (6.7%)
Seattle (6.4%)
Nassau County, NY (-14.9%)
Atlanta (-13.6%)
Houston (-11.6%)
Riverside, CA (-10.8%)
Fort Lauderdale, FL (-10%)
Increased in 14 metros
New listings
San Jose, CA (46.6%)
Sacramento, CA (27.6%)
Phoenix (27.4%)
Jacksonville, FL (27.2%)
Dallas (22.9%)
Newark, NJ (-12.4%)
Providence, RI (-6.3%)
Milwaukee (-4.6%)
Chicago (-4.5%)
Detroit (-3.1%)
Declined in 9 metros
To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-home-prices-mortgage-rates-increase
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email [email protected]. To view Redfin’s press center, click here.
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