Mortgage and refinance rates for July 31, 2023 ended slightly lower.
Mortgage and refinance rates for July 31, 2023 ended slightly lower.
Mortgage Rates: Trending Down and Providing Affordability for Homebuyers
Our experts at Insider have been keeping a close eye on mortgage rates, providing valuable insights and answering readers’ home-buying questions. After a period of climbing rates, we have good news for potential homebuyers – mortgage rates are starting to trend down, providing some affordability for those who have been waiting to enter the market.
Falling Mortgage Rates and Economic Outlook
Inflation has been slowing this year, and experts predict this trend will continue as the economy cools down in the coming months. This deceleration of inflation will help alleviate the upward pressure on mortgage rates, allowing them to fall to more favorable levels. The Mortgage Bankers Association’s latest forecast predicts that 30-year rates will drop to 5.9% by the end of this year, and even further in 2024 and 2025.
Lower mortgage rates are a welcome relief for potential homebuyers who have been patiently waiting for rates to drop before starting their home search. If you are one of those waiting, you may have the perfect opportunity to jump into the market later this year.
Today’s Mortgage Rates and Mortgage Refinance Rates
Here are the current mortgage rates for potential homebuyers and those looking to refinance their existing mortgages:
- 30-Year Fixed Mortgage Rates: The average rate for a 30-year fixed mortgage is currently 6.81%, according to Freddie Mac. This represents a 3-basis-point increase from the previous week.
- 15-Year Fixed Mortgage Rates: The average rate for a 15-year fixed mortgage is 6.11%, showing a 5-basis-point increase from the previous week.
Utilize Our Mortgage Calculator
To understand how today’s mortgage rates would affect your monthly and long-term payments, try using our free mortgage calculator. By inputting different term lengths and interest rates, you can visualize how your monthly payment may change based on various scenarios. It’s a valuable tool to help you plan and make informed financial decisions.
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Exploring Mortgage Options: 30-Year and 15-Year Fixed Mortgages
The 30-year fixed-rate mortgage remains the most common type of home loan. With this mortgage, you will repay the borrowed amount over 30 years, and your interest rate will remain fixed for the duration of the loan. While the lengthy term allows for lower monthly payments, it does come with a higher interest rate compared to shorter terms or adjustable-rate mortgages.
On the other hand, the 15-year fixed-rate mortgage is a favorable option for those seeking predictability and interest savings. With lower rates and a shorter term, you have the potential to save tens of thousands of dollars in interest. However, it’s important to note that the monthly payments will be higher compared to a 30-year term.
Are Mortgage Rates Going Up or Down?
Mortgage rates started increasing from historic lows in the second half of 2021 and saw significant increases in 2022. However, the outlook for this year is more optimistic, with mortgage rates expected to trend down.
The recent 3% increase in the Consumer Price Index signifies a notable slowdown compared to previous months, indicating that mortgage rates will likely start falling soon. While waiting for rates to ease, homeowners looking to leverage their home’s value for a major purchase, such as a home renovation, may consider a home equity line of credit (HELOC). HELOC rates are currently relatively low compared to other loan options.
Understanding the Relationship Between Fed Rate Hikes and Mortgages
Although the federal funds rate hikes by the Federal Reserve do not directly impact mortgage rates, they can influence market sentiments. Mortgage rates often change based on investor demand for mortgage-backed securities, which can be influenced by investors’ expectations of how Fed policy moves will affect the broader economy.
As inflation continues to decline, mortgage rates are expected to follow suit. However, the Federal Reserve has indicated that it will closely monitor signs of sustained slowing inflation and is not likely to lower rates in the near future.
In conclusion, the prospect of falling mortgage rates provides a glimmer of hope for potential homebuyers. With rates expected to trend down in the coming months, there is a possibility of increased affordability in the housing market. Utilize our mortgage calculator and explore your options to make the most informed decision when entering the market.
