Mortgage rates fell across all terms from a week ago, according to rate data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all receded.
The multiple rate cut predictions from the start of the year may be no more, as many experts expect rates to stay higher for longer. The movement of fixed mortgage rates parallels the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy, inflation and Federal Reserve decisions. At the close of the latest Fed meeting on May 1, policymakers held firm and opted not to cut rates. The recent April Consumer Price Index (CPI) data shows inflation slowing, but still not to the 2 percent rate the Fed wants.
“The market was enamored with a slightly lower CPI. We are in a ‘buy on any positive news no matter how modest’ state,” says Dick Lepre of RealFinity.
Often, the decision to buy a home isn’t based on market shifts. It comes down to what you need. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than hoping for a future of more favorable rates and home prices that might not materialize.
Rates last updated May 22, 2024.
These rates are averages based on the assumptions shown here. Actual rates displayed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, May 22nd, 2024 at 7:30 a.m. ET.
30-year fixed-rate mortgage retreats, -0.15%
The average rate you’ll pay for a 30-year fixed mortgage today is 7.02 percent, down 15 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.30 percent.
At the current average rate, you’ll pay principal and interest of $666.65 for every $100,000 you borrow. That’s $10.11 lower, compared with last week.
Learn more about 30-year mortgage rates, and compare to a variety of other loan types.
15-year fixed mortgage rate trends down, -0.19%
The average rate for a 15-year fixed mortgage is 6.48 percent, down 19 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost $870 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
5/1 ARM trends down, -0.05%
The average rate on a 5/1 ARM is 6.80 percent, ticking down 5 basis points over the last week.
Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be considerably 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 6.80 percent would cost about $652 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
Jumbo mortgage rate declines, -0.07%
The average rate for a jumbo mortgage is 7.15 percent, a decrease of 7 basis points over the last seven days. A month ago, the average rate was higher at 7.35 percent.
At today’s average rate, you’ll pay principal and interest of $675.41 for every $100,000 you borrow. That’s lower by $4.73 than it would have been last week.
Mortgage refinance rates
30-year mortgage refinance moves lower, -0.18%
The average 30-year fixed-refinance rate is 7.04 percent, down 18 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was higher at 7.32 percent.
At the current average rate, you’ll pay $667.99 per month in principal and interest for every $100,000 you borrow. That’s lower by $12.15 than it would have been last week.
Where are mortgage rates going?
The rates on 30-year mortgages mostly mirror the 10-year Treasury yield, which changes with the market, while the cost of variable-rate home loans more directly mirrors the Fed’s moves.
If and when the Fed cuts interest rates depends on economic reports of new data, such as the inflation rate and the jobs market. April’s CPI data — which measures inflation — showed inflation at 3.4 percent. While inflation has fallen since its peak in 2022, it’s still above the Fed’s target rate of 2 percent.
“The April CPI report revealed that the rate of inflation has cooled for the first time in 6 months,” says Melissa Cohn of William Raveis Mortgage. “While this one report is not enough evidence of cooling inflation to get the Fed to implement a rate cut, it is the first step.”
Broader economic factors, such as inflation and employment, affect the Fed’s decisions on rate changes, but your rate is also affected by your personal finances. Depending on your credit score, down payment, debts and income, you could be quoted a rate that’s higher or lower than the trend.
What today’s rates mean for you and your mortgage
Mortgage rates change daily, but it appears that, for now, they will remain above the historical lows of recent years. If you’re shopping for a mortgage, 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.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
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Source: bankrate.com