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Average mortgage rates moved higher for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans edged higher.
While mortgage rates are still on track to gradually come down this year, the path might be bumpy. Lenders price mortgages based on many variables, but overall, fixed mortgage rates follow the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy and Federal Reserve decisions.
The Fed opted to keep interest rates as-is at its latest meeting, neither raising nor reducing the benchmark federal funds rate. The central bank has been working to steer inflation back to 2 percent for two years now, and — despite inflation above that target — still anticipates cutting rates this year.
“The Fed is not in a hurry to start cutting interest rates as the progress toward 2 percent inflation has encountered some turbulence,” says Greg McBride, CFA, chief financial analyst for Bankrate.
For now, the Fed expects to issue three rate cuts in 2024. When that happens, the rates on a variety of financial products, including mortgages, should follow suit.
Whether mortgage rates move up or down, though, it’s tough to time the market. Often, the decision to buy a home comes down to needs. Depending on your situation, it might make sense to take a higher rate now and hope to refinance later — buying a home at today’s prices rather than a higher price in the future, while building equity that much sooner.
Rates last updated April 8, 2024.
These rates are averages based on the assumptions here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Monday, April 8th, 2024 at 7:30 a.m.
30-year fixed-rate mortgage trends higher, +0.09%
Today’s average 30-year fixed-mortgage rate is 6.97 percent, up 9 basis points since the same time last week. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 6.90 percent.
At the current average rate, you’ll pay a combined $663.29 per month in principal and interest for every $100,000 you borrow. Compared to last week, that’s $6.03 higher.
Standard lending practices defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers buying a home as it allows the borrower to scatter loan payments out over 30 years, keeping their monthly payment lower.
15-year mortgage rate trends higher, +0.04%
The average rate you’ll pay for a 15-year fixed mortgage is 6.38 percent, up 4 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost $865 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.
5/1 adjustable rate mortgage trends higher, +0.05%
The average rate on a 5/1 adjustable rate mortgage is 6.56 percent, adding 5 basis points over the last week.
Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.56 percent would cost about $636 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
Current jumbo mortgage rate moves upward, +0.08%
The average rate for the benchmark jumbo mortgage is 7.09 percent, an increase of 8 basis points over the last seven days. A month ago, the average rate was below that at 7.04 percent.
At the current average rate, you’ll pay $671.36 per month in principal and interest for every $100,000 you borrow. Compared to last week, that’s $5.39 higher.
Refinance rates
Current 30 year mortgage refinance rate goes up, +0.11%
The average 30-year fixed-refinance rate is 6.99 percent, up 11 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was lower at 6.84 percent.
At the current average rate, you’ll pay $664.63 per month in principal and interest for every $100,000 you borrow. That’s an increase of $7.37 over what you would have paid last week.
Where are mortgage rates heading?
With inflation still above the Fed’s 2 percent goal and the job market holding strong, policymakers refrained from cutting rates at the central bank’s latest meeting. That could change later this year, as the Fed still expects to slash rates three times in 2024.
Keep in mind: The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.
What today’s rates mean for you and your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
To help you uncover the best deal, get at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Source: bankrate.com