Powell to Congress: Higher rates are “the absolute best thing we can do for the housing market…” – “…particularly for younger people who are not yet in the housing market.”
By Wolf Richter for WOLF STREET.
However we want to interpret this, it’s fascinating. Powell told Congress on Tuesday: “There’s no question that higher interest rates are making it harder to buy homes in the short term. But in the longer term, this is the best thing, particularly for younger people who are not yet in the housing market.”
Did he mean that younger people would benefit from lower home prices, or at least an end of the home-price increases, and that higher rates are going to accomplish that? I don’t know. To speak that truth would be, sacrilege?
“Higher interest rates” means higher than they used to be, so even if the Fed cuts its rates a few times in the future, they’d still be much higher than before the pandemic, and mortgage rates would still be much higher as well.
The purpose of the higher rates is to “get back to 2% inflation for the whole economy,” he said, according to MarketWatch, “so that the housing market can be on a better foundation.”
These higher rates are “the absolute best thing we can do for the housing market and for the economy [so as] to sustainably bring inflation back down, so that people aren’t talking about it anymore,” he said.
Higher for Longer: 7% mortgages a year so far.
According to the Mortgage Bankers Association today, the average conforming 30-year fixed mortgage rate was 7.0% in the latest reporting week.
The 7% mortgage has been a fixture in the housing market for a year. This measure of the average mortgage rate has hovered around 7% since July 2023, ranging from 6.75% at peak-Rate-Cut Mania in January 2024 to 7.9% in October 2023. It has been above 6% since September 2022.
People who financed a home purchase with mortgage rates at 6% or 7% or over 7% since September 2022, hoping that they would be able to refinance that mortgage quickly into a 4% mortgage, have gotten stuck with their mortgage payments.
These new homeowners with 7% mortgages and big mortgage payments may be forced to cut back spending on other goods and services, thereby lowering demand for those goods and services. The Fed is counting on them to do that. They’re one of the official transmission channels of Fed policy rates to the overall economy, to lower demand, and thereby lower inflationary pressures.
Potential homebuyers today have to do the same calculus: When will mortgage rates drop far enough to make it worthwhile refinancing a 7% mortgage, given the points and expenses involved in a refi? This is a tough call – especially since renting an equivalent house is now a lot less costly on a monthly basis.
Compared to the pre-QE era, a 7% mortgage rate is not breaking new ground: From 1970 through 2001, mortgage rates ranged from 7% to 18%. Lower home prices made those higher mortgage rates work.
But ultra-low mortgage rates fuel housing bubbles. When mortgage rates dropped as low as 5.5% in 2005, they fueled Housing Bubble 1, which led to the Housing Bust from 2006-2012. The pandemic-era below-3% mortgages did a wonderful job inflating housing prices in a historic manner.
But now, these 7% mortgages conflict with the too-high prices. And something has to give.
With prices too high, buyers’ strike continues.
Mortgage applications to purchase a home in the latest reporting week remained near the historic lows in the data going back to 1995, and have been there over the past 12 months. The record lows in the data were set in November 2023 and February 2024. Note the mini-spike in January 2024 at the peak of Rate-Cut Mania.
Mortgage applications to purchase a home in the latest week plunged by almost half from the same period in 2021 and 2019:
From 2023: -13%
From 2022: -36%
From 2021: -47%
From 2019: -48%
Mortgage applications are an early indication of home sales volume – an early indication that buyers who need mortgages remain on strike because prices are too high with those rates:
Inventory has been rising, as sales plunged amid rising new listings, and so active listings exploded in some metros on a year-over-year basis in June, and for the US overall, they jumped by 37% year-over-year. And there’s now plenty to choose from, but prices are too high.
Mortgage applications to refinance a home collapsed in 2022 when mortgage rates surged, and have remained steadfastly at these collapsed levels. Refis without cash-out have nearly vanished. Most of the few refis that are still taking place are cash-out refis.
In the latest reporting week, applications for refinance mortgages edged down further and were down by 84% from the same week in 2021 and by 70% from the same week in 2019.
Refis are a function of mortgage rates. They had experienced a historic boom when mortgage rates plunged to the 2.5%-3.0% range. And they collapsed when mortgage rates began to surge starting in early 2022.
The chart shows the inverse relationship between refi applications (red) and mortgage rates (blue).
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Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.
Mortgage rates have moved very little over the past week. Today’s 30-year fixed rate is down to 7.28% APR, according to data from Curinos analyzed by the MarketWatch Guides team. The 15-year fixed rate is down to 6.61% APR.
The U.S. Bureau of Labor Statistics released its monthly jobs report on Friday. While there were 206,000 jobs created in June, one-third of new hires were for government jobs and fewer jobs were created in April and May than originally announced. Employment data can affect mortgage rates in two main ways: by influencing the Federal Reserve’s interest rate adjustments and affecting home demand, which in turn impacts rates and pricing.
The Federal Reserve has previously indicated that it will not cut the federal funds rate, the short-term interest rate that impacts mortgage rates and financial markets in the U.S., until it sees signs that the economy is slowing, with inflation that remains at or under 2% and steady unemployment rates around 4%. The next economic report that economists are closely watching is this week’s Consumer Price Index, which reports price levels around the country and is one major indicator of inflation rates.
Here are today’s average mortgage rates:
30-year fixed mortgage rate: 7.28%
15-year fixed mortgage rate: 6.61%
5/6 ARM mortgage rate: 7.01%
Jumbo mortgage rate: 7.18%
Current Mortgage Rates
Product
Rate
Last Week
Change
30-Year Fixed Rate
7.28%
7.30%
-0.02
15-Year Fixed Rate
6.61%
6.68%
-0.07
5/6 ARM
7.01%
7.06%
-0.05
7/6 ARM
7.10%
7.14%
-0.04
10/6 ARM
7.27%
7.27%
0.00
30-Year Fixed Rate Jumbo
7.18%
7.17%
+0.01
30-Year Fixed Rate FHA
6.94%
6.96%
-0.02
30-Year Fixed Rate VA
6.98%
7.01%
-0.03
Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Tuesday, July 09, 2024. Actual rates may vary.
>> View historical mortgage rate trends
Mortgage Rates for Home Purchase
30-year fixed-rate mortgages are down, -0.02
The average 30-year fixed-mortgage rate is 7.28%. Since the same time last week, the rate is down, changing -0.02 percentage points.
At the current average rate, you’ll pay $684.21 per month in principal and interest for every $100,000 you borrow. You’re paying less compared to last week when the average rate was 7.30%.
15-year fixed-rate mortgages are down, -0.07
The average rate you’ll pay for a 15-year fixed-mortgage is 6.61%, a decrease of-0.07 percentage points compared to last week.
Monthly payments on a 15-year fixed-mortgage at a rate of 6.61% will cost approximately $877.17 per $100,000 borrowed. With the rate of 6.68% last week, you would’ve paid $881.03 per month.
5/6 adjustable-rate mortgages are down, -0.05
The average rate on a 5/6 adjustable rate mortgage is 7.01%, a decrease of-0.05 percentage points over the last seven days.
Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years.
Monthly payments on a 5/6 ARM at a rate of 7.01% will cost approximately $665.97 per $100,000 borrowed over the first 5 years of the loan.
Jumbo loan interest rates are up, +0.01
The average jumbo mortgage rate today is 7.18%, an increase of+0.01 percentage points over the past week.
Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than $726,200.
Product
Monthly P&I per $100,000
Last Week
Change
30-Year Fixed Rate
$684.21
$685.57
-$1.36
15-Year Fixed Rate
$877.17
$881.03
-$3.86
5/6 ARM
$665.97
$669.34
-$3.37
7/6 ARM
$672.03
$674.73
-$2.70
10/6 ARM
$683.53
$683.53
$0.00
30-Year Fixed Rate Jumbo
$677.43
$676.76
+$0.67
30-Year Fixed Rate FHA
$661.28
$662.62
-$1.34
30-Year Fixed Rate VA
$663.96
$665.97
-$2.01
Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively.
Factors That Affect Your Mortgage Rate
Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month.
But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include:
Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money.
Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).
Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates.
Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.
How To Shop for the Best Mortgage Rate
Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate.
1. Check credit scores and credit reports
A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate.
Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans.
2. Know the options
There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation.
The table below describes each program, highlighting minimum credit score and down payment requirements.
Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage.
3. Compare quotes across multiple lenders
Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.
After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve negotiating power with home sellers.
4. Review loan estimates
To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points.
By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.
5. Consider negotiating with lenders on rates
Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan.
Expert Forecasts for Mortgage Rates
Mortgage rates have cooled significantly over the past several months. After the 30-year fixed-rate mortgage hit 8% last October, it ended 2023 closer to 7%. In fact, the average for Q4 2023 was 7.3%.
Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year.
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
More Mortgage Resources
Methodology
Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here. Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
Saving for a down payment is one of the biggest obstacles to homeownership. Can you buy a house with no money down? It’s possible, but the conditions to qualify for a no-down-payment mortgage are highly specific. If you aren’t eligible, it might be easier to qualify for a low-down-payment mortgage.
No-down-payment loans include VA loans, backed by the Department of Veterans Affairs, and USDA loans, guaranteed by the U.S. Department of Agriculture. VA loans are available to current and veteran service members and eligible spouses, and USDA loans are available for people buying property in specific rural and suburban areas.
However, even a no-down-payment mortgage may still require some cash: You’ll likely have up-front expenses like fees, closing costs and mortgage insurance (or you might be able to roll them into your loan).
Low-down-payment mortgages include FHA loans, insured by the Federal Housing Administration, which require down payments as low as 3.5%. And even some of today’s conventional loans allow down payments as low as 3%.
The lenders on this list offer home loans with no down payment (zero-down mortgages) and/or low-down-payment FHA or conventional loans.
The star ratings shown are specific to the product featured from each lender. The list includes a mix of FHA, VA and conventional loans.
Why trust NerdWallet
50+ mortgage lenders reviewed and rated by our team of experts.
40+ years of combined experience covering mortgages and financial topics.
Objective, comprehensive star rating system assessing 120+ categories and 5,000+ data points.
Governed by NerdWallet’s strict guidelines for editorial integrity.
NerdWallet’s mortgage content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in home lending. Their work has appeared in The Associated Press, USA Today, The Washington Post, MarketWatch, Newsweek and many other national, regional and local publications. They have been cited in publications including The Wall Street Journal, and appeared on NerdWallet’s “Smart Money” podcast as well as local TV and radio.
Mortgage rates fell below 7% last week for the first time since March — leading to an uptick in the number of applications for loans from would-be home buyers.
The rate for a 30-year fixed mortgage fell from 7.02% to 6.94% for the week that ended June 14, according to Mortgage Bankers Association data released on Wednesday.
The five-year adjustable-rate mortgage fell to 6.27% from 6.45% — the lowest level since February, according to the data, which was first reported by Bloomberg News and MarketWatch..
Mortgage rates fell below 7% last week for the first time since March. Getty Images
There was also an increase in the number of mortgage applications for home purchases in the seven-day period that ended on Friday.
The market index rose 0.9% to 210.4 for the week ending June 14 from a week before. A year ago, the index stood at 209.8.
“Purchase applications increased a small amount for the week, led by applications for conventional loans,” Mike Fratantoni, MBA chief economist, said in a statement.
Federal Reserve is more likely to cut interest rates sometime this year.
Investors are banking on at least one rate cut.
Last week, Fed officials said that while inflation has crept closer to their 2% target, they still expect to cut their benchmark interest rate just once this year — possibly as late as December.
The housing market has been in a slump which has been exacerbated by sky-high interest rates and sticky inflation. REUTERS
The policymakers’ forecast for one rate cut was down from their previous projection of three cuts.
Inflation has remained stubbornly high, forcing the Fed to keep the benchmark rate between 5.25% and 5.50% — the highest in 23 years.
The benchmark rate has remained at that level since July of last year, after the Fed raised it 11 times to try to slow borrowing and cool inflation.
High mortgage rates and rising prices continued to put a damper on the spring home-buying season.
Existing home sales fell 1.9% to a seasonally adjusted annual rate of 4.14 million in April from a revised 4.22 million in March, the National Association of Realtors reported.
An anticipated interest rate cut by the Fed could spur more home-buying. REUTERS
Sales dropped across the country — down 4% in the Northeast, 2.6% in the West, 1.6% in the South and 1% in the Midwest.
The median price of previously occupied homes rose 5.7% to $407,600 — the tenth straight increase and a record for April.
Lawrence Yun, the association’s chief economist, called the sales drop “a little frustrating.’’ Economists had expected sales to come in at 4.2 million.
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.
Mortgage rates continue their modest decline this week, although 30-year fixed rates continue to hover well above 7%. According to data from Curinos analyzed by MarketWatch Guides, today’s 30-year fixed rate is down to 7.22% APR.
On Friday, a stronger-than-expected jobs report led Lawrence Yun, chief economist for the National Association of Realtors, to predict rates will continue to remain above 7% for the next month.
While high rates continue to affect the housing market, there’s a silver lining for younger and first-time homebuyers. Real estate marketplace Realtor.com released data Tuesday indicating there are more smaller and lower-priced homes on the market than this time last year, based on price-per-square-foot data. Since last May, there has been a 46.6% increase in the amount of homes in the $200,000 to $350,000 price range across the U.S.
Here are today’s average mortgage rates:
30-year fixed mortgage rate: 7.22%
15-year fixed mortgage rate: 6.47%
5/6 ARM mortgage rate: 7.09%
Jumbo mortgage rate: 7.15%
Current Mortgage Rates
Product
Rate
Last Week
Change
30-Year Fixed Rate
7.22%
7.40%
-0.18
15-Year Fixed Rate
6.47%
6.71%
-0.24
5/6 ARM
7.09%
7.07%
+0.02
7/6 ARM
7.20%
7.24%
-0.04
10/6 ARM
7.27%
7.30%
-0.03
30-Year Fixed Rate Jumbo
7.15%
7.25%
-0.10
30-Year Fixed Rate FHA
6.89%
7.02%
-0.13
30-Year Fixed Rate VA
6.91%
7.04%
-0.13
Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Friday, June 14, 2024. Actual rates may vary.
>> View historical mortgage rate trends
Mortgage Rates for Home Purchase
30-year fixed-rate mortgages are down, -0.18
The average 30-year fixed-mortgage rate is 7.22%. Since the same time last week, the rate is down, changing -0.18 percentage points.
At the current average rate, you’ll pay $680.14 per month in principal and interest for every $100,000 you borrow. You’re paying less compared to last week when the average rate was 7.40%.
15-year fixed-rate mortgages are down, -0.24
The average rate you’ll pay for a 15-year fixed-mortgage is 6.47%, a decrease of-0.24 percentage points compared to last week.
Monthly payments on a 15-year fixed-mortgage at a rate of 6.47% will cost approximately $869.46 per $100,000 borrowed. With the rate of 6.71% last week, you would’ve paid $882.69 per month.
5/6 adjustable-rate mortgages are up, +0.02
The average rate on a 5/6 adjustable rate mortgage is 7.09%, an increase of+0.02 percentage points over the last seven days.
Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years.
Monthly payments on a 5/6 ARM at a rate of 7.09% will cost approximately $671.36 per $100,000 borrowed over the first 5 years of the loan.
Jumbo loan interest rates are down, -0.10
The average jumbo mortgage rate today is 7.15%, a decrease of-0.10 percentage points over the past week.
Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than $726,200.
Product
Monthly P&I per $100,000
Last Week
Change
30-Year Fixed Rate
$680.14
$692.38
-$12.24
15-Year Fixed Rate
$869.46
$882.69
-$13.23
5/6 ARM
$671.36
$670.01
+$1.35
7/6 ARM
$678.79
$681.50
-$2.71
10/6 ARM
$683.53
$685.57
-$2.04
30-Year Fixed Rate Jumbo
$675.41
$682.18
-$6.77
30-Year Fixed Rate FHA
$657.93
$666.65
-$8.72
30-Year Fixed Rate VA
$659.27
$667.99
-$8.72
Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively.
Factors That Affect Your Mortgage Rate
Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month.
But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include:
Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money.
Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).
Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates.
Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.
How To Shop for the Best Mortgage Rate
Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate.
1. Check credit scores and credit reports
A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate.
Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans.
2. Know the options
There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation.
The table below describes each program, highlighting minimum credit score and down payment requirements.
Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage.
3. Compare quotes across multiple lenders
Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.
After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve negotiating power with home sellers.
4. Review loan estimates
To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points.
By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.
5. Consider negotiating with lenders on rates
Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan.
Expert Forecasts for Mortgage Rates
Mortgage rates have cooled significantly over the past several months. After the 30-year fixed-rate mortgage hit 8% last October, it ended 2023 closer to 7%. In fact, the average for Q4 2023 was 7.3%.
Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year.
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
More Mortgage Resources
Methodology
Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here. Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
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.
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.
Mortgage rates have largely held steady after a stronger-than-forecasted jobs report on Friday. The 30-year fixed-rate mortgage was 7.24% APR today, down -0.02 percentage points from last week, according to data from Curinos analyzed by MarketWatch Guides.
In its monthly report on job growth, the Bureau of Labor Statistics announced an employment gain of 303,000 new jobs for March with the unemployment rate decreasing slightly from 3.9% to 3.8%. These “eye-popping” numbers could mean the Federal Reserve will hold off even longer on lowering interest rates, said Steve Wyett, chief investment strategist at BOK Financial in an email sent to MarketWatch.
While positive for the overall economy, this does not seem to be welcome news for the housing market. Joel Kan, the Mortgage Banker Association’s deputy chief economist, said in a report on Wednesday that today’s relatively high mortgage rates have continued to slow down home buying. Refinance rates are also 5% lower than last year.
Here are today’s average mortgage rates:
30-year fixed mortgage rate: 7.24%
15-year fixed mortgage rate: 6.58%
5/6 ARM mortgage rate: 7.03%
Jumbo mortgage rate: 7.20%
Current Mortgage Rates
Product
Rate
Last Week
Change
30-Year Fixed Rate
7.24%
7.26%
-0.02
15-Year Fixed Rate
6.58%
6.52%
+0.06
5/6 ARM
7.03%
7.01%
+0.02
7/6 ARM
7.24%
7.18%
+0.06
10/6 ARM
7.28%
7.22%
+0.06
30-Year Fixed Rate Jumbo
7.20%
7.14%
+0.06
30-Year Fixed Rate FHA
6.91%
6.97%
-0.06
30-Year Fixed Rate VA
6.96%
7.03%
-0.07
Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Monday, April 08, 2024. Actual rates may vary.
>> View historical mortgage rate trends
Mortgage Rates for Home Purchase
30-year fixed-rate mortgages are down, -0.02
The average 30-year fixed-mortgage rate is 7.24%. Since the same time last week, the rate is down, changing -0.02 percentage points.
At the current average rate, you’ll pay $681.50 per month in principal and interest for every $100,000 you borrow. You’re paying less compared to last week when the average rate was 7.26%.
15-year fixed-rate mortgages are up, +0.06
The average rate you’ll pay for a 15-year fixed-mortgage is 6.58%, an increase of+0.06 percentage points compared to last week.
Monthly payments on a 15-year fixed-mortgage at a rate of 6.58% will cost approximately $875.51 per $100,000 borrowed. With the rate of 6.52% last week, you would’ve paid $872.21 per month.
5/6 adjustable-rate mortgages are up, +0.02
The average rate on a 5/6 adjustable rate mortgage is 7.03%, an increase of+0.02 percentage points over the last seven days.
Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years.
Monthly payments on a 5/6 ARM at a rate of 7.03% will cost approximately $667.32 per $100,000 borrowed over the first 5 years of the loan.
Jumbo loan interest rates are up, +0.06
The average jumbo mortgage rate today is 7.20%, an increase of+0.06 percentage points over the past week.
Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than $726,200.
Product
Monthly P&I per $100,000
Last Week
Change
30-Year Fixed Rate
$681.50
$682.85
-$1.35
15-Year Fixed Rate
$875.51
$872.21
+$3.30
5/6 ARM
$667.32
$665.97
+$1.35
7/6 ARM
$681.50
$677.43
+$4.07
10/6 ARM
$684.21
$680.14
+$4.07
30-Year Fixed Rate Jumbo
$678.79
$674.73
+$4.06
30-Year Fixed Rate FHA
$659.27
$663.29
-$4.02
30-Year Fixed Rate VA
$662.62
$667.32
-$4.70
Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively.
Factors That Affect Your Mortgage Rate
Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month.
But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include:
Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money.
Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).
Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates.
Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.
How To Shop for the Best Mortgage Rate
Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate.
1. Check credit scores and credit reports
A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate.
Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans.
2. Know the options
There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation.
The table below describes each program, highlighting minimum credit score and down payment requirements.
Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage.
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3. Compare quotes across multiple lenders
Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.
After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve negotiating power with home sellers.
4. Review loan estimates
To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points.
By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.
5. Consider negotiating with lenders on rates
Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan.
Expert Forecasts for Mortgage Rates
Mortgage rates have cooled significantly over the past several months. After the 30-year fixed-rate mortgage hit 8% last October, it ended 2023 closer to 7%. In fact, the average for Q4 2023 was 7.3%.
Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year.
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
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More Mortgage Resources
Methodology
Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here. Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
The U.S. 15-year mortgage rate is at the lowest level in two months, industry group says
The numbers: The U.S. housing market is feeling a chill once again as home buyers pull back on applying for mortgages with rates staying near 7%.
Yet some buyers are finding rates in the low 6% range by turning to 15-year fixed-rate mortgages instead of the traditional 30-year loan.
Nevertheless, weakening demand overall pushed the market composite index – a measure of mortgage application volume – down in the last week, according to the Mortgage Bankers Association (MBA) on Wednesday.
The market index fell 0.6% to 195.6 for the week ending March 29 from a week ago. A year ago, the index stood at 217.9.
Key details: The purchase index – which measures mortgage applications for the purchase of a home – fell 0.1% from a week ago.
The refinance index fell 1.6%.
The average contract rate for the 30-year mortgage for homes sold for $766,550 or less was 6.91% for the week ending March 29. That’s down from 6.93% from the week before.
The rate for jumbo loans, or the 30-year mortgage for homes sold for over $766,550, was 7.06%, down from 7.14% a week ago.
The average rate for a 30-year mortgage backed by the Federal Housing Administration was 6.74%, down from 6.75% a week ago.
The 15-year fell to 6.35% from 6.46% from the previous week. The 15-year fixed was at the lowest level in two months, the MBA said.
The rate for adjustable-rate mortgages was up to 6.37%, from 6.27% last week.
The big picture: Home buyers are putting off buying a home due to elevated mortgage rates straining how much they can afford.
Even though for-sale inventory has shown signs of rising in recent weeks, demand isn’t picking up, which means that sales activity will not pick up as quickly.
To be sure, the data does not fully capture buyer demand as some are buying homes without mortgages. A third of home buyers paid for their home purchases with cash in February, as real-estate brokerage Redfin notes.
What the MBA said: “Elevated mortgage rates continued to weigh down on home buying,” Joel Kan, vice president and deputy chief economist at the MBA, said in a statement. “Purchase applications were unchanged overall, although [Federal Housing Administration] purchases did pick up slightly over the week.”
-Aarthi Swaminathan
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.
Mortgage rates have moved gradually over the past few weeks, with the 30-year fixed-rate mortgage reaching 7.20% APR today, after standing at 7.45% a month ago, according to data from Curinos analyzed by MarketWatch Guides.
Rates moved upward just before last week’s meeting of the Federal Reserve. While the Fed kept interest rates steady, Chairman Jerome Powell indicated in a press conference Wednesday that the board still expected to cut interest rates three times in 2024 despite “seasonal effects” causing a temporary rise in inflation.
Last month’s home prices rose 9.5% month-over-month for February, the largest increase in a year. The median home price increased 5.7% from last year, to $384,500, the National Association of Realtors reported on Thursday.
Here are today’s average mortgage rates:
30-year fixed mortgage rate: 7.20%
15-year fixed mortgage rate: 6.46%
5/6 ARM mortgage rate: 6.99%
Jumbo mortgage rate: 7.10%
Current Mortgage Rates
Product
Rate
Last Week
Change
30-Year Fixed Rate
7.20%
7.19%
+0.01
15-Year Fixed Rate
6.46%
6.48%
-0.02
5/6 ARM
6.99%
6.98%
+0.01
7/6 ARM
7.17%
7.14%
+0.03
10/6 ARM
7.20%
7.22%
-0.02
30-Year Fixed Rate Jumbo
7.10%
7.09%
+0.01
30-Year Fixed Rate FHA
6.93%
6.90%
+0.03
30-Year Fixed Rate VA
6.98%
6.98%
0.00
Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Friday, March 29, 2024. Actual rates may vary.
>> View historical mortgage rate trends
Mortgage Rates for Home Purchase
30-year fixed-rate mortgages are up, +0.01
The average 30-year fixed-mortgage rate is 7.20%. Since the same time last week, the rate is up, changing +0.01 percentage points.
At the current average rate, you’ll pay $678.79 per month in principal and interest for every $100,000 you borrow. You’re paying more compared to last week when the average rate was 7.19%.
15-year fixed-rate mortgages are down, -0.02
The average rate you’ll pay for a 15-year fixed-mortgage is 6.46%, a decrease of-0.02 percentage points compared to last week.
Monthly payments on a 15-year fixed-mortgage at a rate of 6.46% will cost approximately $868.91 per $100,000 borrowed. With the rate of 6.48% last week, you would’ve paid $870.01 per month.
5/6 adjustable-rate mortgages are up, +0.01
The average rate on a 5/6 adjustable rate mortgage is 6.99%, an increase of+0.01 percentage points over the last seven days.
Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years.
Monthly payments on a 5/6 ARM at a rate of 6.99% will cost approximately $664.63 per $100,000 borrowed over the first 5 years of the loan.
Jumbo loan interest rates are up, +0.01
The average jumbo mortgage rate today is 7.10%, an increase of+0.01 percentage points over the past week.
Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than $726,200.
Product
Monthly P&I per $100,000
Last Week
Change
30-Year Fixed Rate
$678.79
$678.11
+$0.68
15-Year Fixed Rate
$868.91
$870.01
-$1.10
5/6 ARM
$664.63
$663.96
+$0.67
7/6 ARM
$676.76
$674.73
+$2.03
10/6 ARM
$678.79
$680.14
-$1.35
30-Year Fixed Rate Jumbo
$672.03
$671.36
+$0.67
30-Year Fixed Rate FHA
$660.61
$658.60
+$2.01
30-Year Fixed Rate VA
$663.96
$663.96
$0.00
Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively.
Factors That Affect Your Mortgage Rate
Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month.
But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include:
Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money.
Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).
Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates.
Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.
How To Shop for the Best Mortgage Rate
Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate.
1. Check credit scores and credit reports
A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate.
Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans.
2. Know the options
There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation.
The table below describes each program, highlighting minimum credit score and down payment requirements.
Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage.
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3. Compare quotes across multiple lenders
Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.
After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve negotiating power with home sellers.
4. Review loan estimates
To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points.
By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.
5. Consider negotiating with lenders on rates
Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan.
Expert Forecasts for Mortgage Rates
Mortgage rates have cooled significantly over the past several months. After the 30-year fixed-rate mortgage hit 8% last October, it ended 2023 closer to 7%. In fact, the average for Q4 2023 was 7.3%.
Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year.
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
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More Mortgage Resources
Methodology
Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here. Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.
Mortgage rates continue to hover around 7%, according to data from Curinos analyzed by MarketWatch Guides. The 30-year fixed-rate mortgage is 7.38% today, up+0.18 percentage points from last week.
In response to lower rates, mortgage applications rose for the first time in six weeks, according to data released by Freddie Mac on Thursday. A Mortgage Bankers Association (MBA) report published Wednesday showed that the volume of FHA loans strongly increased for the previous week, an indicator that first-time home buyers are getting back into the market – a potentially optimistic sign for the spring buying season.
Another potential good omen: Former Federal Reserve official James Bullard said he thinks the likelihood of another rate cut in the near future is strong, given the announcement in February’s job report that the unemployment rate has risen slightly. The Federal Reserve board will meet again next week.
Here are today’s average mortgage rates:
30-year fixed mortgage rate: 7.38%
15-year fixed mortgage rate: 6.69%
5/6 ARM mortgage rate: 7.05%
Jumbo mortgage rate: 7.19%
Current Mortgage Rates
Product
Rate
Last Week
Change
30-Year Fixed Rate
7.38%
7.20%
+0.18
15-Year Fixed Rate
6.69%
6.54%
+0.15
5/6 ARM
7.05%
6.92%
+0.13
7/6 ARM
7.26%
7.08%
+0.18
10/6 ARM
7.30%
7.16%
+0.14
30-Year Fixed Rate Jumbo
7.19%
7.05%
+0.14
30-Year Fixed Rate FHA
7.12%
6.94%
+0.18
30-Year Fixed Rate VA
7.14%
6.97%
+0.17
Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Tuesday, March 19, 2024. Actual rates may vary.
>> View historical mortgage rate trends
Mortgage Rates for Home Purchase
30-year fixed-rate mortgages are up, +0.18
The average 30-year fixed-mortgage rate is 7.38%. Since the same time last week, the rate is up, changing +0.18 percentage points.
At the current average rate, you’ll pay $691.02 per month in principal and interest for every $100,000 you borrow. You’re paying more compared to last week when the average rate was 7.20%.
15-year fixed-rate mortgages are up, +0.15
The average rate you’ll pay for a 15-year fixed-mortgage is 6.69%, an increase of+0.15 percentage points compared to last week.
Monthly payments on a 15-year fixed-mortgage at a rate of 6.69% will cost approximately $881.59 per $100,000 borrowed. With the rate of 6.54% last week, you would’ve paid $873.31 per month.
5/6 adjustable-rate mortgages are up, +0.13
The average rate on a 5/6 adjustable rate mortgage is 7.05%, an increase of+0.13 percentage points over the last seven days.
Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years.
Monthly payments on a 5/6 ARM at a rate of 7.05% will cost approximately $668.66 per $100,000 borrowed over the first 5 years of the loan.
Jumbo loan interest rates are up, +0.14
The average jumbo mortgage rate today is 7.19%, an increase of+0.14 percentage points over the past week.
Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than $726,200.
Product
Monthly P&I per $100,000
Last Week
Change
30-Year Fixed Rate
$691.02
$678.79
+$12.23
15-Year Fixed Rate
$881.59
$873.31
+$8.28
5/6 ARM
$668.66
$659.94
+$8.72
7/6 ARM
$682.85
$670.68
+$12.17
10/6 ARM
$685.57
$676.08
+$9.49
30-Year Fixed Rate Jumbo
$678.11
$668.66
+$9.45
30-Year Fixed Rate FHA
$673.38
$661.28
+$12.10
30-Year Fixed Rate VA
$674.73
$663.29
+$11.44
Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively.
Factors That Affect Your Mortgage Rate
Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month.
But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include:
Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money.
Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).
Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates.
Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.
How To Shop for the Best Mortgage Rate
Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate.
1. Check credit scores and credit reports
A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate.
Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans.
2. Know the options
There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation.
The table below describes each program, highlighting minimum credit score and down payment requirements.
Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage.
3. Compare quotes across multiple lenders
Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.
After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve negotiating power with home sellers.
4. Review loan estimates
To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points.
By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.
5. Consider negotiating with lenders on rates
Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan.
Expert Forecasts for Mortgage Rates
Mortgage rates have cooled significantly over the past several months. After the 30-year fixed-rate mortgage hit 8% last October, it ended 2023 closer to 7%. In fact, the average for Q4 2023 was 7.3%.
Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year.
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
More Mortgage Resources
Methodology
Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here. Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.