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Average mortgage rates came down on all loan 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 dropped.
The average rate on the popular 30-year fixed-rate loan at times exceeded 8 percent in recent weeks, following a jump in 10-year Treasury yields. After a period of record lows, mortgage rates climbed in 2022 as inflation spiked and the Federal Reserve responded aggressively. The Fed last hiked its key interest rate in July, which brought up borrowing costs on a variety of financial products, including mortgages.
The central bank held firm on another rate hike this month, indicating it expects rates to stay on the higher side for the foreseeable future.
“To have the full effect of keeping interest rates higher for longer, the Fed will maintain a posture that rates could go higher and that any rate cuts are quite a ways off,” says Greg McBride, CFA, Bankrate chief financial analyst.
The rise in mortgage rates comes alongside appreciating home prices, both of which have kept homebuyers on the sidelines. More than half of home purchase mortgages originated in July had a monthly payment over $2,000, according to Black Knight. Twenty-three percent of originations in July had a payment over $3,000. The affordability squeeze is stretching budgets, and keeping many first-time homebuyers out of the market altogether.
Rates as of November 9, 2023.
The rates listed above are Bankrate’s overnight average rates and are based on the assumptions shown here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, November 9th, 2023 at 7:30 a.m.
30-year mortgage declines, -0.19%
Today’s average 30-year fixed-mortgage rate is 7.83 percent, down 19 basis points from a week ago. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 7.89 percent.
At the current average rate, you’ll pay a combined $721.95 per month in principal and interest for every $100,000 you borrow. That’s down $13.21 from what it would have been last week.
Use the loan widgets on this page or head to our primary rates page to see what kind of rates are available in your situation. You just need to give us a little information about your finances and where you live. With that data, Bankrate can show you real-time estimates of mortgages available to you from a number of providers.
15-year mortgage rate retreats, -0.08%
The average 15-year fixed-mortgage rate is 7.12 percent, down 8 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $906 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, 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 rapidly.
5/1 adjustable rate mortgage declines, -0.14%
The average rate on a 5/1 ARM is 6.97 percent, ticking down 14 basis points over the last week.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to refinance or sell 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 6.97 percent would cost about $663 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, -0.17%
The average rate for the benchmark jumbo mortgage is 7.83 percent, down 17 basis points from a week ago. This time a month ago, the average rate for jumbo mortgages was higher, at 7.92 percent.
At the current average rate, you’ll pay $721.95 per month in principal and interest for every $100,000 you borrow. That represents a decline of $11.81 over what it would have been last week.
Interested in refinancing? See rates for home refinance
30-year mortgage refinance trends down, -0.12%
The average 30-year fixed-refinance rate is 7.96 percent, down 12 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 8.08 percent.
At the current average rate, you’ll pay $730.98 per month in principal and interest for every $100,000 you borrow. That’s a decline of $8.37 from last week.
Where are mortgage rates heading?
Most rate watchers polled by Bankrate predict mortgage rates will rise this upcoming week. Looking to the remainder of the year, some forecasters still expect to see rates decrease, but the state of the U.S. economy and rising 10-year Treasury yields will be key factor.
30-year fixed mortgage rates mostly follow the 10-year Treasury yield, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
“Economic data that is not too hot and not too cold would be helpful to mortgage rates and could get rates back down below 7 percent,” says Greg McBride, chief financial analyst for Bankrate, adding, “but that has to be true for inflation, job growth, wages and consumer spending.”
What these rates mean for you and your mortgage
While mortgage rates move up and down on a daily basis,, there is some consensus that we won’t see rates return to 3 percent for some time. 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 expected, 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