Unlock Your Savings: Today’s Mortgage Rates Surpass 52-Week Average!

Heads up, homebuyers! This week, mortgage rates have taken a leap. The latest data reveals that the 30-year fixed mortgage rate has surged 13 basis points, landing at a solid 6.85%. That’s a jump of 24 basis points compared to the same week last year. But here’s a silver lining: it’s still a bit lower than the May peak of 7.22%.

In a recent update, Freddie Mac’s Chief Economist shared some insight: “While we see a slight uptick in new and existing home sales, the market is still grappling with a significant shortage of homes. A robust economy could spark momentum as we transition into the new year, potentially amplifying buying activities.” If you’ve been hesitating to pull the trigger on a new home in hopes of lower rates, it might be time to shift your focus. Consider enhancing your financial health and shopping around for mortgage lenders to secure the best rate possible.

Curious? Discover more: How the Federal Reserve rate decision impacts mortgage rates

Here’s a snapshot of the current mortgage rates based on the latest Zillow statistics:

• 30-year fixed: 6.73%

• 20-year fixed: 6.58%

• 15-year fixed: 6.09%

• 5/1 ARM: 6.78%

• 7/1 ARM: 6.65%

• 30-year VA: 6.16%

• 15-year VA: 5.59%

• 5/1 VA: 6.35%

Keep in mind, these statistics reflect national averages rounded to the nearest hundredth.

Want to get the best deal? Check out:5 strategies to get the lowest mortgage rates

And if you’re considering refinancing, here are the latest refinance rates you should know about:

• 30-year fixed: 6.70%

• 20-year fixed: 6.54%

• 15-year fixed: 5.93%

• 5/1 ARM: 6.11%

• 7/1 ARM: 6.70%

• 30-year VA: 6.15%

• 15-year VA: 5.99%

• 5/1 VA: 5.84%

Keep in mind, these numbers represent national averages rounded to the nearest hundredth. Refinance rates can often be higher than purchase rates, though this isn’t always the case.

Explore your options: Want to refinance your mortgage? Here are 7 home refinance options.

Don’t forget, you can take advantage of a free mortgage payment calculator to see how different mortgage rates and loan terms can impact your monthly payments.

Our calculator also factors in homeowners insurance, property taxes, and other related expenses, giving you a clearer picture of your potential monthly outlay. This is way more informative than just crunching the numbers on the mortgage principal and interest alone.

A mortgage interest rate is the fee associated with borrowing money from your lender, expressed as a percentage. You can choose between two main types: fixed or adjustable.

With a fixed-rate mortgage, you lock in your rate for the entire loan term. For instance, if you secure a 30-year mortgage at 6%, that rate stays put for the full three decades—unless you refinance or sell your home.

On the other hand, an adjustable-rate mortgage (ARM) gives you a fixed rate for a specific timeframe, after which it may fluctuate. For example, if you secure a 7/1 ARM at 6%, you’ll enjoy that rate for the first seven years, then it will adjust annually based on market conditions for the remaining 23 years. The direction of those adjustments depends on factors like the economy and housing market trends.

In the early stages of your mortgage, a large portion of your monthly payment goes toward interest. While your payment towards mortgage principal and interest remains steady over time, the breakdown shifts, meaning that over the years, you will contribute more toward your principal and less toward interest.

Want to learn more?Adjustable-rate vs. fixed-rate mortgages

A 30-year fixed-rate mortgage is ideal if you’re looking for lower payments and the comfort of consistency. Just bear in mind, your rate will be higher than if you went with a shorter term, leading to significantly more interest over the loan duration.

If you want to pay off your loan quicker and save on interest, a 15-year fixed-rate mortgage could be the way to go. Shorter terms typically come with lower rates, and since you’re halving your repayment period, the savings on interest can be substantial. Just ensure you can manage the higher monthly payments associated with a 15-year term.

Need guidance?How to decide between a 15-year and 30-year fixed-rate mortgage

Typically, an adjustable-rate mortgage is a solid option if you plan to sell before the introductory period wraps up. ARMs often start with lower rates than fixed ones, and then adjust after a set timeframe. However, right now, 5/1 and 7/1 ARM rates are very similar to 30-year fixed rates. So before opting for an ARM just for the lower rate, make sure to compare your options across different terms and lenders.

Mortgage rates have been mostly stagnant or climbing since mid-September. However, the 30-year rate saw a decline three weeks ago, and the 15-year rate has also dipped for two consecutive weeks.

Currently, we’re witnessing another uptick in rates over the past fortnight.

Looking ahead, it’s unlikely that mortgage rates will drop significantly before 2024 wraps up. While there’s potential for a decrease in 2025, the Federal Reserve is only anticipating a couple of rate cuts in the upcoming year, suggesting any reductions will be gradual.

Stay informed: When will the housing market crash again?

As of this week, the national average for a 30-year mortgage rate is up 15 basis points to 6.85%, while the average for a 15-year mortgage has climbed by eight basis points to 6.00%.

In its December housing forecast, projections indicate that the 30-year mortgage rate might settle at 6.60% by the end of 2024. Both the Mortgage Bankers Association and other analysts are echoing similar predictions.

There’s a reasonable expectation that mortgage rates could actually dip in 2025. However, the next few months will be crucial as market dynamics respond to upcoming political shifts and Fed decisions. Stay tuned!