Unlock Today’s Best Mortgage Rates: January 3, 2025 Insights!
Current Mortgage Rates Today
Welcome to a fresh start! As we usher in the new year, mortgage rates have been on a downward swing for the second consecutive day. This news is music to the ears of borrowers, especially after witnessing a rise in rates as we wrapped up 2024.
However, don’t get too comfortable just yet. The current market indicators suggest that we might see upward pressure on mortgage rates in the near future.
Today’s Mortgage and Refinance Rates
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| Program | Mortgage Rate | APR* | Change |
|---|---|---|---|
| Conventional 30-Year Fixed | 6.987% | 7.033% | -0.02 |
| Conventional 20-Year Fixed | 6.76% | 6.81% | -0.07 |
| Conventional 15-Year Fixed | 6.287% | 6.36% | -0.06 |
| Conventional 10-Year Fixed | 6.121% | 6.175% | -0.12 |
| 30-Year Fixed FHA | 7.664% | 7.702% | Unchanged |
| 30-Year Fixed VA | 7.475% | 7.508% | +0.28 |
| 5/1 ARM Conventional | 6.25% | 6.91% | -0.35 |
| Rates are sourced from our partner network and may not reflect the market. Your individual rate may vary. Click here for a personalized rate quote. For our rate assumptions, see them here. | |||
>Related: 7 Insider Tips for Scoring the Best Refinance Rates
30-Year Fixed Rate Mortgage
As of today, the average rate for a 30-year fixed mortgage sits at 6.95%.
For context, this rate has seen a record low of 2.65% in January 2021 and a staggering high of 8.89% back in December 1994, according to the latest data.
A 30-year FRM is a popular choice for many borrowers, as it provides an affordable monthly payment, although you may end up paying more in interest over the life of the loan compared to its shorter-term counterparts.
15-Year Fixed Rate Mortgage
Today, the average rate for a 15-year fixed mortgage has climbed to 6.28%.
This loan type experienced a record low of 2.1% in July 2021, with a peak rate of 18.63% in September 1981, according to historical data.
The 15-year FRM is perfect for those looking to pay off their mortgage faster and save on interest, but keep in mind that monthly payments will be significantly higher.
5/1 Adjustable-Rate Mortgage
This morning, the average 5/1 adjustable-rate mortgage stands at 6.52%.
ARMs usually kick off with lower initial interest rates compared to fixed loans. After the initial five-year period, rates adjust based on current market conditions. Homebuyers with short-term plans often find these mortgages to be a smart choice.
Market Data Influencing Today’s Mortgage Rates
Here’s a quick snapshot of the current market dynamics that could impact mortgage rates:
- The yield on 10-year Treasury notes dipped to 4.571% from 4.573%. (Good news for mortgage rates.) Mortgage rates are heavily influenced by these Treasury bond yields.
- Major stock indexes saw an uptick this morning. (Potentially bad for mortgage rates.) When investors flock to stocks, they often sell bonds, which can push bond prices down and elevate yields, leading to higher mortgage rates.
- Oil prices have risen to $74.05 from $73.50 a barrel. (Another factor that could hurt mortgage rates.) Fluctuations in energy prices can create inflationary pressures and signal changes in economic activity.
- Gold prices fell to $2,653 from $2,667 an ounce. (Neutral for now, but not a good sign for mortgage rates.) Rising gold prices usually signal economic uncertainty, which tends to favor lower rates.
- The CNN Business Fear & Greed index jumped to 31 from 27. (Bad for mortgage rates.) A higher index value often means investors feel “greedy,” leading them to sell bonds and push interest rates upward.
*Note: Changes of less than $20 in gold prices or 40 cents in oil prices are considered negligible for mortgage rate impacts.
Understanding Market Trends and Mortgage Rates
In the unpredictable landscape of the post-pandemic economy, the relationship between market indicators and mortgage rates has evolved. While we still make educated estimates daily, our accuracy may not reach historical highs until things stabilize.
Thus, consider these market signals only as rough guides. Today’s mortgage rates may inch upwards or stay largely unchanged, but expect “intraday swings” as rates can fluctuate throughout the day.
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What’s Influencing Mortgage Rates Today?
This Week’s Economic Insights
Watch for two key economic reports today, kicking off with the Institute for Supply Management’s manufacturing index. December’s reading climbed to 49.3%, a positive leap from November’s 48.4% and surpassing market forecasts.
Throughout the day, vehicle manufacturers will report December auto sales. While these stats usually don’t impact mortgage rates directly, they can provide insight into consumer spending trends.
Additionally, two Federal Reserve officials will be addressing the media today. Richmond President Tom Barkin will share insights on inflation concerns, while Fed Governor Adriana Kugler will be interviewed at 4 PM ET.
Recent Trends Snapshot
As per the latest report on January 2, the average 30-year fixed mortgage rate registered at 6.91%, marking a six-basis-point increase from the previous week. It’s important to note that these figures can lag behind real-time market conditions.
Expert Rate Forecasts
Looking ahead, Fannie Mae and the Mortgage Bankers Association (MBA) have dedicated teams of economists keeping tabs on the economy and housing market trends.
Here are their quarterly forecasts for 2025 regarding 30-year fixed-rate mortgages:
| Forecaster | Q1/25 | Q2/25 | Q3/25 | Q4/25 |
| Fannie Mae | 6.6% | 6.4% | 6.3% | 6.2% |
| MBA | 6.6% | 6.5% | 6.4% | 6.4% |
Freddie Mac’s Mortgage Market Outlook anticipates that the economy will continue to grow at a slower pace in 2025, with inflation gradually aligning closer to the Federal Reserve’s target of 2%. They foresee a slow decline in mortgage rates over the coming year, albeit with caution.
Keep in mind that these predictions come with a degree of uncertainty, especially given the volatile nature of interest rates in today’s market.
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Understanding Mortgage Rate Methodology
We compile rates from various lending partners daily, averaging the figures for each loan type to provide you with a comprehensive snapshot of current mortgage rates. This approach gives you a clearer view of what to expect in the marketplace.
Current Mortgage Rates Methodology
Our current mortgage rates are updated daily, based on data from a network of lenders offering home purchase and refinance loans. The rates presented here reflect typical borrower profiles for each loan type. For more details on our loan assumptions, click here.
Frequently Asked Questions about Today’s Mortgage Rates
A good mortgage rate aligns with the current market trends and your financial situation. As of January 2, 2025, the average rate for a 30-year fixed mortgage sits at 6.91%, while the 15-year fixed mortgage averages 6.13%.
Mortgage rates are influenced by various factors, including economic conditions, your credit score, loan term, and overall housing market trends. Lenders also consider the loan amount, down payment, and whether the loan is conventional or government-backed.
To find the best mortgage rates, explore options from a diverse range of lenders, including banks, credit unions, and online providers. Collecting multiple quotes will empower you to identify the most competitive rates and terms that fit your financial goals.
Choosing between these options often depends on your financial objectives and risk tolerance. If you value stability and plan to stay in your home long-term, a fixed-rate mortgage may be your best bet. Conversely, if you’re open to some risk and plan to move or refinance before potential rate adjustments, an adjustable-rate mortgage could provide initial savings.
While forecasts suggest gradual decreases in mortgage rates throughout 2025, short-term increases are also on the table. If you’re closing soon, locking in your rate might offer you peace of mind, but trust your instincts and risk tolerance when deciding whether to float or lock.
