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Mortgage rates have been relatively stable this week and remain well below where they started July. Average 30-year mortgage rates are currently at 6.78%, nearly flat from the week before, according to Freddie Mac .
Mortgage rates fell earlier this month in response to cooler-than-expected inflation data, and they're expected to fall further throughout the remainder of 2024 as long as inflation continues to decelerate and the Federal Reserve is able to start lowering the federal funds rate.
"Mortgage rates essentially remained flat from last week but have decreased nearly half a percent from their peak earlier this year," Sam Khater, Freddie Mac's chief economist, said in a press release . "Despite these lower rates, buyers continue to pause, as reflected in tumbling new and existing home sales data."
The National Association of Realtors reported on Tuesday that existing-home sales were down 5.4% year over year in June. The summer is usually a peak time for the housing market, but rising prices and still-high mortgage rates have kept demand relatively low. As rates fall, affordability should improve, bringing more buyers back onto the market.
Mortgage Rates Today
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30-Year Fixed Mortgage Rates
Last week's average 30-year fixed mortgage rate was 6.78%, according to Freddie Mac . This is a one-basis-point increase 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 6.07% last week, according to Freddie Mac data. This is a two-basis-point increase from 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 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.
The Fed has indicated that it's likely done hiking rates and that it could start cutting this year. This would allow mortgage rates to trend down later this year.
When Will Mortgage Rates Go Down?
Mortgage rates increased dramatically over the last two years, but they're expected to go down at some point this year.
In June 2024, the Consumer Price Index rose 3.0% year-over-year . Inflation has slowed significantly since it peaked last year, which means mortgage rates should soon start trending down.
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.
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