Unlock Savings: Mortgage Refinance Rates Dip from 5-Month Peak!
:max_bytes(150000):strip_icc()/GettyImages-1407675003-0b0b185f6bfb438e91a994052d479076.jpg?w=1500&resize=1500,1000&ssl=1 "Unlock Savings: Mortgage Refinance Rates Dip from 5-Month Peak!")
After reaching a remarkable five-month peak just yesterday, the average refinancing rate for 30-year mortgages has pulled back to 7.14% as of Thursday. This is a notable shift from the 19-month low of 6.01% we saw back in September, marking a spike of over 1.1 percentage points since then. The market is buzzing with changes, and you won’t want to miss out!
This Tuesday, the refinancing landscape showed mixed signals among various loan types, with many rates inching downward. The 15-year refinance average dipped just 1 basis point, while the 20-year and jumbo 30-year refinance rates fell by 2 and 17 basis points, respectively. What does this mean for you? Let’s break it down!
| National Averages of Lenders’ Best Rates – Refinance | ||
|---|---|---|
| Loan Type | Refinance Rates | Daily Change |
| 30-Year Fixed | 7.14% | -0.05 |
| FHA 30-Year Fixed | 6.29% | No Change |
| VA 30-Year Fixed | 6.46% | -0.04 |
| 20-Year Fixed | 7.08% | -0.02 |
| 15-Year Fixed | 6.08% | -0.01 |
| FHA 15-Year Fixed | 6.09% | No Change |
| 10-Year Fixed | 6.38% | +0.03 |
| 7/6 ARM | 7.29% | +0.10 |
| 5/6 ARM | 6.84% | -0.01 |
| Jumbo 30-Year Fixed | 6.96% | -0.17 |
| Jumbo 15-Year Fixed | 6.77% | -0.28 |
| Jumbo 7/6 ARM | 7.08% | No Change |
| Jumbo 5/6 ARM | 7.50% | -0.07 |
Important
Keep in mind that the rates you see here may differ from those enticing teaser rates often showcased online. These teaser rates are typically cherry-picked to appear attractive and might require paying points upfront or be based on ideal borrower profiles. Your final rate will depend on various factors, including your credit score and income, so it’s essential to stay informed and shop smart!
With rates swinging widely across lenders, taking the time to compare mortgage refinance options is not just smart—it’s necessary! Explore your choices and find the path that best suits your financial goals.
Wondering how much you might pay each month for different loan scenarios? Use our Mortgage Calculator to crunch the numbers!
What Causes Mortgage Rates to Rise or Fall?
Mortgage rates are influenced by a myriad of factors, both economic and industry-specific. Here’s what you need to know:
- The performance of the bond market, especially the movements in 10-year Treasury yields.
- The current monetary policy of the Federal Reserve, particularly as it pertains to bond purchasing and government-backed mortgage funding.
- Competition among mortgage lenders across various loan types.
Due to the interplay of these factors, pinpointing a single cause for rate changes can be quite complex.
In fact, macroeconomic conditions kept mortgage rates relatively low for much of 2021. The Federal Reserve’s bond-buying spree in response to pandemic-driven economic challenges played a significant role in this trend.
However, starting in November 2021, the Fed began to taper its purchases, ultimately reaching a standstill by March 2022.
From that point until July 2023, the Fed’s aggressive hikes to the federal funds rate aimed at combating soaring inflation significantly influenced mortgage rates, although this influence is often indirect.
Given the rapid pace of the Fed’s rate increases—5.25 percentage points over just 16 months—the indirect effects on mortgage rates have been substantial.
The Fed maintained its peak rate for nearly 14 months, but on September 18, it announced its first rate cut of 0.50 percentage points, soon followed by quarter-point reductions on November 7 and December 18.
However, the Fed’s latest conference signaled caution due to persistent inflation, projecting that further cuts may be less frequent. This careful outlook has pushed 10-year Treasury yields up, in turn leading to a surge in mortgage rates.
How We Track Mortgage Rates
The national and state averages mentioned are sourced via the Zillow Mortgage API, based on a loan-to-value (LTV) ratio of 80% (which means a down payment of at least 20%) and a credit score range of 680–739. These averages reflect what borrowers can expect when getting quotes from lenders, contrasting with the appealing teaser rates often seen. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.
