Mortgage Interest Rates Today, August 9, 2024 | Rates Drop to 15-Month Low. Is It Time to Refinance?

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Mortgage rates fell dramatically this week. Average 30-year mortgage rates dropped 26 basis points to 6.47%, their lowest level since May 2023, according to Freddie Mac . Average 15-year rates were 5.63% this week, down 36 basis points from the week before.

Mortgage rates fell in response to unexpectedly weak labor market data that sparked fears the economy could be heading toward a recession, though these fears seem to have eased a bit over the last couple of days.

"The decline in mortgage rates does increase prospective homebuyers' purchasing power and should begin to pique their interest in making a move," Sam Khater, Freddie Mac's chief economist, said in a press release . "Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42 percent, the highest since March 2022."

Because rates are now so low compared to where they've been hovering for most of the year, homeowners may be starting to wonder if they should refinance their mortgage now .

If today's mortgage rates are lower than the rate you're currently paying, refinancing could be worth it. Just be sure to look at the full picture, including how much it will cost to refinance. Additionally, mortgage rates are expected to go down further this year and in 2025, so you may be able to save even more by waiting a bit before refinancing.

Today's mortgage rates

Today's refinance rates

Mortgage Calculator

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.

Mortgage Rate Projection for 2024

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased dramatically in 2022 and throughout most of 2023.

Now that inflation has decelerated and a Fed cut is looking more likely, mortgage rates have trended down. In the last 12 months, the Consumer Price Index rose by 3.0%. This is a significant slowdown compared when it peaked at 9.1% in 2022. So mortgage rates could soon fall further.

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.

When Will House Prices Come Down?

We aren't likely to see home prices drop this year. In fact, they'll probably rise.

Fannie Mae researchers expect prices to increase 6.1% in 2024 and 3.0% in 2025, while the Mortgage Bankers Association expects a 4.5% increase in 2024 and a 3.3% increase in 2024.

Sky high mortgage rates have pushed many hopeful buyers out of the market, slowing homebuying demand and putting downward pressure on home prices. But rates have since eased, removing some of that pressure. The current supply of homes is also historically low, which will likely push prices up.

What Happens to House Prices in a Recession?

House prices usually drop during a recession, but not always. When it does happen, it's generally because fewer people can afford to purchase homes, and the low demand forces sellers to lower their prices.

How Much Mortgage Can I Afford?

A mortgage calculator like the one above can help you determine how much house you can afford. Play around with different home prices and down payment amounts to see how much your monthly payment could be, and think about how that fits in with your overall budget.

Typically, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means your entire monthly mortgage payment, including taxes and insurance, shouldn't exceed 28% of your pre-tax monthly income.

The lower your rate, the more you'll be able to borrow, so shop around and get preapproved with multiple mortgage lenders to see who can offer you the best rate. But remember not to borrow more than what your budget can comfortably handle.