Posts from November 16th, 2023

Mortgage interest rates were mostly lower compared to a week ago, according to data compiled by Bankrate. Average rates for 30-year fixed, 15-year fixed and jumbo loans decreased, while rates for adjustable rate mortgages rose.

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 took action. 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 greater than $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 accurate as of November 16, 2023.

The rates listed here are marketplace averages based on the assumptions shown here. Actual rates available within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, November 16th, 2023 at 7:30 a.m.

30-year fixed-rate mortgage drops, -0.08%

The average rate you'll pay for a 30-year fixed mortgage today is 7.75 percent, down 8 basis points over the last seven days. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 8.03 percent.

At the current average rate, you'll pay principal and interest of $716.41 for every $100,000 you borrow. That's lower by $5.54 than it would have been last week.

Use our mortgage calculator to estimate your monthly payments and see how much you'll save by adding extra payments. The tool will also help you calculate how much interest you'll fork up over the life of your loan.

15-year fixed mortgage rate trends down, -0.03%

The average rate for the benchmark 15-year fixed mortgage is 7.09 percent, down 3 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost $904 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, 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 quickly.

5/1 ARM moves up, +0.01%

The average rate on a 5/1 adjustable rate mortgage is 6.98 percent, up 1 basis point over the last week.

Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for those who expect to refinance or sell before the first or second adjustment. Rates could be much 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 6.98 percent would cost about $664 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan's terms.

Current jumbo mortgage rate retreats, -0.06%

The average jumbo mortgage rate is 7.77 percent, down 6 basis points over the last week. Last month on the 16th, the average rate on a jumbo mortgage was greater than 7.77, at 8.05 percent.

At today's average jumbo rate, you'll pay a combined $717.79 per month in principal and interest for every $100,000 you borrow. That's down $4.16 from what it would have been last week.

Refinance rates

30-year mortgage refinance eases, -0.01%

The average 30-year fixed-refinance rate is 7.95 percent, down 1 basis point compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 8.14 percent.

At the current average rate, you'll pay $730.28 per month in principal and interest for every $100,000 you borrow. That's lower by $0.70 than it would have been last week.

Where are mortgage rates heading?

Most rate watchers polled by Bankrate believe 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.

The rates on 30-year home loans 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 current rates mean for your mortgage

While mortgage rates fluctuate considerably,, 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 anticipated, 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?"

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