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Average 30-year mortgage rates are currently more than half of a percentage point lower than they started the month. Rates have dropped dramatically across the board so far in November in response to data that shows the economy has slowed substantially since the Federal Reserve started hiking the federal funds rate last year.
At its November meeting, the Fed kept rates steady and signaled that it’s closely watching the latest economic data to determine whether more hikes are necessary to bring inflation down to its target.
Right now, it’s looking like we may have already hit the end of this hiking cycle. It’s possible we could even get one or two rate cuts by July of next year, according to the CME FedWatch Tool. This is great news for mortgage rates, since it means we’ll likely see some substantial drops in 2024. This will increase affordability and allow more homebuyers to re-enter the market.
Mortgage Rates Today
Mortgage Refinance Rates Today
Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.
By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
30-Year Fixed Mortgage Rates
This week’s average 30-year fixed mortgage rate is 7.44%, according to Freddie Mac. This is a six-point decrease from the previous week.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates.
15-Year Fixed Mortgage Rates
Average 15-year mortgage rates fell to 6.76% this week, according to Freddie Mac data. This is a five-point drop since the week before.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.
How Do Fed Rate Hikes Affect Mortgages?
The Federal Reserve has increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has slowed significantly, but it’s still a bit above the Fed’s 2% target rate.
Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.
Investors generally believe that the Fed is done hiking rates, and that it could start cutting rates next year. This has allowed mortgage rates to trend down somewhat.
When Will Mortgage Rates Go Down?
Mortgage rates increased dramatically over the last two years, but they’re expected to trend down next year.
In October 2023, the Consumer Price Index rose 3.2% year-over-year. Inflation has slowed significantly since it peaked last year, which is good news for mortgage rates.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.