Mortgage industry insights

Mortgage rates tick up

The average rate on 30-year fixed mortgages rose to 6.93 percent this week, up from 6.88 percent last week, according to Bankrate's weekly national survey of large lenders.

Mortgage rates fell sharply in mid-December as the Federal Reserve wrapped up its final meeting of 2023 with no rate hike. At the time, the Fed signaled several rate cuts in 2024. Mortgage rates responded by free-falling from 7.21 percent to 6.88 percent in a single week.

However, any more steep declines in mortgage rates seem unlikely for now, in large part because the Fed is again talking about keeping rates higher for longer. Two recent data points have slowed the momentum: higher-than-expected jobs numbers and an uptick in inflation. Those readings are cooling expectations for a rate cut at the Fed's next meeting.

"The Fed's next move is going to be determined by this week's data, and it doesn't look like a rate cut in March is in the cards anymore," says Melissa Cohn of William Raveis Mortgage.

While the Fed doesn't directly set fixed mortgage rates, its monetary policies do influence their direction.

A growing number of housing economists say mortgage rates could stay below 7 percent in the coming months. In his 2024 mortgage rate forecast, Greg McBride, Bankrate's chief financial analyst, predicts 30-year rates will fall to 5.75 percent by the end of this year.

For now, though, McBride says it appears rate cuts won't happen for a while.

"Rate cuts aren't coming nearly as soon as investors had hoped," says McBride.

If you're shopping for a mortgage, keep in mind that 6.93 percent is just an average — some lenders advertise below-average rates on Bankrate.

Location plays a role, too. In some areas of the U.S., rates are below 6.75 percent.

Many homebuyers have been sidelined by higher rates, along with the ever-present issue of low inventory. Inflation, the economy and Fed policy will remain the main factors driving mortgage rates in the coming months.

Learn more: Weekly mortgage rate trend analysis

Current mortgage and refinance interest rates

How to get the best mortgage rate for you

Getting the best possible rate on your mortgage can mean a difference of hundreds of extra dollars in or out of your budget each month — not to mention thousands saved in interest over the life of the loan. You won't know what rates you qualify for, though, unless you comparison-shop. Here's how to do it:

1. Determine what type of mortgage is right for you. Consider your credit score and down payment, how long you plan to stay in the home, how much you can afford in monthly payments and whether you have the risk tolerance for a variable-rate loan versus a fixed-rate loan.
2. Compare mortgage rates. There's only one way to be sure you're getting the best available rate, and that's to shop at least three lenders, including large banks, credit unions and online lenders, or by using a mortgage broker. Bankrate offers a mortgage rates comparison tool to help you find the right rate from a variety of lenders. Keep in mind: Mortgage rates change daily, even hourly, based on market conditions, and vary by loan type and term.
3. Choose the best mortgage offer for you. Bankrate's mortgage calculator can help you estimate your monthly mortgage payment, which can be useful as you consider your budget. Look at the APR, not just the interest rate. The APR is the total cost of the loan, including the interest rate and other fees. These fees are part of your closing costs.