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Mortgage rates remain lower today than they were two weeks ago, which is good news for borrowers.
As inflation continues to slow, mortgage rates should come down as well. But the job market is one area of the economy that is showing continued strength even as the Federal Reserve raises the federal funds rate.
Last week, jobless claims fell, according to the Labor Department. The latest jobs report, released earlier this month, showed that the US economy gained more jobs than expected in October.
Fed Chairman Jerome Powell has indicated that the central bank is watching the labor market as a key indicator of whether the economy is effectively cooling in response to its rate hike. In his press conference after the November Fed meeting, Powell noted that the labor market is “out of balance.”
“Reducing inflation is likely to require a period of continued below-trend growth and some weak labor market conditions,” Powell said.
So far, the market expects a 50 basis point hike from the Fed at its December meeting, according to the CME FedWatch Tool. But if economic data continues to show a still-hot job market and inflation doesn’t fall further, the Fed could opt for bigger hikes. This is likely to raise mortgage rates again.
Mortgage rates today
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Today’s mortgage refinancing rates
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Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly payment. By entering different rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.
Estimate your monthly payment
- Paying a 25% a higher down payment will save you money $8,916.08 on interest charges
- Lower the interest rate by 1% will save you $51,562.03
- Pay extra $500 each month will reduce the loan period by 146 moon
Click “More information” for tips on how to save money on your mortgage in the long run.
30 year fixed mortgage rate
The current average 30-year fixed mortgage rate is 6.61%, according to Freddie Mac. This is a decrease of almost 50 basis points from the previous week.
A 30-year fixed rate mortgage is the most common type of home loan. With this type of mortgage, you will pay back what you borrow over 30 years, and your interest rate will not change for the life of the loan.
A long 30-year term allows you to spread 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 a shorter term or adjustable rate.
15 year fixed mortgage rate
The average 15-year fixed mortgage rate was 5.98%, down from the previous week, according to Freddie Mac data.
If you want the predictability that comes with a fixed rate but want to reduce interest expenses over the life of your loan, a 15-year fixed rate mortgage may be right for you. Because these terms are shorter and have lower rates than a 30-year fixed-rate mortgage, you can potentially save tens of thousands of dollars in interest. However, you will end up with a higher monthly payment than you would with a longer term.
Are mortgage rates rising?
Mortgage rates began to rise from historic lows in the second half of 2021 and have risen significantly so far in 2022. But mortgage rates have fallen recently, and they may not go back up again this year.
In the past 12 months, the Consumer Price Index increased by 7.7%. The Federal Reserve has been working to control inflation, and is expected to raise the federal funds rate again this year, following hikes at its previous six meetings.
Inflation remains high, but has begun to slow, which bodes well for mortgage rates and the broader economy.
How will Fed rate hikes affect mortgages?
The Fed has raised the federal funds rate this year to try to slow economic growth and control inflation.
Mortgage rates are not directly affected by changes in the federal funds rate, but they often rise or fall before the Fed’s policy moves. That’s because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often influenced by how investors expect Fed hikes to affect the broader economy.
When inflation starts to fall, mortgage rates should too. But the Fed has indicated that it is watching for signs of continued slowing inflation, and that it will not stop raising rates anytime soon – although it may begin to opt for smaller hikes at the next few meetings.
Are HELOCs a good idea right now?
Many homeowners have acquired a lot of equity in recent years as home prices have increased at an unprecedented rate. But because rates are so high right now, tapping into that equity can be expensive.
For homeowners looking to leverage their home’s value to cover a large purchase — such as a home renovation — a home equity line of credit (HELOC) may still be a good option.
A HELOC is a line of credit that allows you to borrow against the equity in your home. It works just like a credit card in that you borrow what you need instead of getting the full amount you borrowed in one go.
Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than with a home equity loan or cash-out refinance. Keep in mind that HELOC rates are variable, so if rates start to rise further, your rate will likely rise as well.