The offers and details on this page may have updated or changed since the time of publication. See our article on Business Insider for current information.
Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.
Mortgage rates have dropped substantially in recent weeks, and they're expected to continue falling this year. So far this month, 30-year mortgage rates have averaged around 6.12%, according to Zillow data. This is 33 basis points down from last month.
Rates have been trending down in recent months thanks to slowing inflation and market expectations that the Federal Reserve will start lowering the federal funds rate in September. New inflation data makes a Fed cut even more likely.
On Wednesday, the Bureau of Labor Statistics reported that the Consumer Price Index, a popular measure of inflation, rose 2.9% year over year in July , down from the previous month's reading of 3.0%. This is the fourth month in a row that inflation has cooled, and the first time the CPI has come in below 3.0% since March 2021.
This means we should see mortgage rates decrease further throughout the rest of 2024 and in 2025. But if you're waiting for rates to drop more before starting the homebuying process, you might want to consider buying now instead.
Rates are still relatively high for many borrowers, which has helped temper homebuying demand. As mortgage rates go down , more and more buyers will jump back into the market, potentially putting a lot of upward pressure on home prices. If you buy now, you'll avoid those higher home prices and increased competition. And if rates drop later on, you can refinance to lower your mortgage payment .
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 2.9%. 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.
Read the original article on
Business Insider 
Most Popular
Comments / 0