Mortgage Interest Rates Today, August 24, 2024

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Mortgage rates dropped substantially earlier this month and they remain low today. Average 30-year mortgage rates were around 6.06% this week, according to Zillow data.

Rates are down thanks to cooling economic data and market expectations that the Federal Reserve will start lowering the federal funds rate at its next meeting in September. In a Friday speech in Jackson Hole, Fed Chair Jerome Powell indicated that a rate cut is coming soon. 

“The time has come for policy to adjust,” Powell said. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Traders have been betting on a September cut for a while now, but the question of whether the Fed will opt for a standard 25-basis-point or a more aggressive 50-basis-point cut remains up in the air. 

Because a September cut has largely already been priced in, mortgage rates may not drop much further in the coming weeks unless incoming economic data shows unexpected weakening. But rates should continue to slowly trend down throughout the remainder of 2024.

Current Mortgage Rates

Current Refinance Rates

Mortgage Calculator

Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.

Click “More details” for tips on how to save money on your mortgage in the long run.

30-Year Fixed Mortgage Rates

The average 30-year fixed mortgage rate was 6.46% last week, according to Freddie Mac. This is a three-basis-point decrease from the previous week.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.

The lengthy 30-year term allows you to spread out 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 shorter terms or adjustable rates. 

15-Year Fixed Mortgage Rates

Last week, average 15-year mortgage rates were 5.62%, a four-basis-point decrease from the previous week, according to Freddie Mac data.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.

When Will Mortgage Rates Go Down?

Mortgage rates have been elevated for most of 2024, but they’ve been trending down in recent months.

As inflation comes down, mortgage rates should fall further. Most major forecasts expect rates to go down throughout the rest of this year and in 2025.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans. 

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve increased the federal funds rate to try to slow economic growth and get inflation under control. Inflation has come down a lot in response to this, though it’s still a little bit above the Fed’s target rate of 2%.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed moves to affect the broader economy. 

Fed hikes have pushed mortgage rates up over the last two years. But the Fed has indicated that it will likely start cutting rates soon. Once the Fed cuts rates, mortgage rates should fall even further.