Breaking News, 2 p.m. ET: Federal Reserve Cuts Interest Rates by 0.50%
CNET Money analyzes the impact of today’s interest rate cut on mortgage rates in their latest article, Today’s Interest Rate Cut Won’t Make Mortgages Affordable Overnight, but It’s Still Good News.
As of today, the average interest rate for a 30-year fixed mortgage is 6.24%, down by 0.06% from last week. The average rate for a 15-year fixed mortgage stands at 5.60%, a 0.04% decrease from a week ago. For more insights into mortgage rate predictions, check here.
With inflation at its lowest since spring 2021 and a weakening labor market, the Federal Reserve’s interest rate cut is expected to lower mortgage rates over the coming months. Generally, economic downturns lead to lower mortgage rates. However, while potential homebuyers are starting to re-enter the market, reduced mortgage rates alone won’t fix the affordability crisis in today’s housing market.
Today’s Average Mortgage Rates (Sept. 18, 2024)
- 30-year fixed-rate: 6.24% (-0.06%)
- 15-year fixed-rate: 5.60% (-0.04%)
- 30-year fixed-rate jumbo: 6.30% (-0.13%)
- 5/1 ARM: 5.78% (-0.10%)
- 10-year fixed-rate: 5.89% (+0.22%)
Rates are sourced from Bankrate, using data from lenders across the U.S. For more details on today’s mortgage rates, click here.
Mortgage rates are at their lowest in over a year. Now could be a good time to compare loan offers and secure the best deal for your home purchase. Enter your information here to receive a custom quote from one of CNET’s lending partners.
Current Mortgage Rate Trends Mortgage rates fluctuate daily due to various factors, including the bond market, investor expectations, inflation, labor data, and the Fed’s monetary policy. Historically, rising inflation leads to increased interest rates as the Fed acts to cool the economy. Over the past few years, the Fed has raised its short-term interest rate to a target range of 5.25% to 5.5%, causing mortgage rates to surge.
Mortgage rates briefly dropped in early August following a weak labor report, sparking recession fears. While the 30-year fixed mortgage rate has dipped below 6.3% in September, it remains more than double the rates seen in 2020-21.
For a four-year lookback at mortgage rate trends, check out the chart below.
When Will Mortgage Rates Go Down? Mortgage rates have already declined in 2024, largely due to market volatility. Though markets are stabilizing, rates may edge up slightly before a long-term decrease. Experts predict that mortgage rates will gradually drop throughout the year, depending on future inflation and labor data. Additional rate cuts from the Fed are anticipated this year, which could further lower mortgage rates.
Greg Sher, managing director at NFM Lending, notes: “Once the cutting begins, it triggers a series of rate cuts over a long period of time. That first cut will allow those tied to housing or interested in buying to exhale.”
However, a return to the ultra-low 2-3% mortgage rates from recent years remains unlikely.
What’s the Best Mortgage Type and Term? Choosing the right mortgage depends on your financial situation and goals. Here’s a quick guide to common mortgage terms:
- 30-year fixed-rate mortgages are the most popular option. While they typically come with a higher interest rate than 15-year mortgages, they offer lower monthly payments.
- 15-year fixed-rate mortgages usually have a lower interest rate, but higher monthly payments, allowing you to pay off the loan faster and save on interest over time.
- 5/1 adjustable-rate mortgages (ARMs) offer lower introductory rates for the first five years. After that, rates adjust annually. These loans may be a good option if you plan to sell or refinance within five years.
Tips for Finding the Best Mortgage Rates
- Save for a larger down payment to reduce your loan amount and overall interest costs.
- Improve your credit score, as higher scores often qualify for lower rates.
- Pay off debt to reduce your debt-to-income ratio and improve your loan terms.
- Explore government loans and assistance programs that offer flexible borrowing requirements and help with down payments.
- Shop around with multiple lenders to secure the lowest rate.
Use CNET’s mortgage calculator to estimate your monthly payment and ensure you stay within your budget. While the housing market remains tough, saving and preparing now will put you in a strong position when the market improves.
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