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Interest rates

Mortgage Rates Update: Current Rates and Future Projections

Strategic Insights

— 2 min read

The current state of mortgage rates is fluid, with fluctuations across various loan types and terms. As of the latest updates, average 30-year fixed mortgage rates are hovering around 6.73%, up 20 basis points from the previous week. This increase is driven by a combination of factors, including the rise in inflation and the anticipation of the Federal Reserve's potential rate cuts in the coming months.

The mortgage market has experienced a steady climb since the second half of 2021, with rates increasing by over three percentage points in 2022. However, recent trends suggest that rates may start to trend back down, albeit at a slower pace than initially expected. The primary driver of this shift is the slowing inflation rate, which is expected to contribute to a decrease in mortgage rates by the end of 2024.

Homebuyers and homeowners can benefit from this situation by exploring alternative financing options, such as home equity lines of credit (HELOCs). With relatively low current HELOC rates and the flexibility to tap into the equity in their home without replacing their entire mortgage, individuals can choose from a range of lenders to find the best loan for their needs.

Key Takeaways:

  • Average 30-year fixed mortgage rates have risen to 6.73%, a 20-basis-point increase from the previous week, according to Zillow data.
  • The average 20-year fixed mortgage rate is 6.43%, an increase of 30 basis points from last week, while the 15-year fixed mortgage rate stands at 6.12%, a 17-basis-point increase.
  • The 7/1 ARM rate has inched up to 6.71%, a 5-basis-point increase, while the 5/1 ARM rate has risen to 6.69%, a 3-basis-point increase.
  • 30-year FHA refinance rates remain flat at 5.79%, but 30-year VA refinance rates have ticked up to 6.17%, a 34-basis-point increase.
  • Mortgage rates are expected to fall by the end of 2024, driven by a slowdown in inflation.
  • Homebuyers and homeowners may consider alternative financing options, such as HELOCs, which offer relatively low rates and the flexibility to tap into home equity.

Statistics:

  • Average 30-year fixed mortgage rate: 6.73%
  • Average 20-year fixed mortgage rate: 6.43%
  • Average 15-year fixed mortgage rate: 6.12%
  • 7/1 ARM rate: 6.71%
  • 5/1 ARM rate: 6.69%
  • 30-year FHA refinance rate: 5.79%
  • 30-year VA refinance rate: 6.17%

Sources:

  • Zillow data
  • CME FedWatch Tool
  • Business Insider
  • CME Group
  • Zillow
  • Business Insider

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