Mortgage rates remain stable while inflation falls below 3%
Image by PM Images/Getty Images; Illustration by Hunter Newton/Bankrate
According to Bankrate’s latest lender survey, mortgage rates remained at 6.59 percent this week, the same rate as last week, and the lowest since May 2023. Rates stable at this level comes as new CPI data shows inflation has fallen below 3 percent for the first time since 2021.
If you took out a mortgage at an interest rate above 7 percent, the door is open to refinancing. If you have an adjustable-rate mortgage and want to get out of it, this is your chance. Mortgage rates are likely to continue to fall in the coming months, but there are no guarantees, and current rates are a bird in the hand for prospective borrowers.
— Greg McBride, CFA, chief financial analyst at Bankrate
Current mortgage rates
| Loan type | Current | 4 weeks ago | A year ago | 52-week average | 52-week low |
|---|---|---|---|---|---|
| 30 years | 6.59% | 7.04% | 7.12% | 7.22% | 6.59% |
| 15 years | 5.89% | 6.38% | 6.54% | 6.55% | 5.89% |
| 30-year jumbo | 6.80% | 7.06% | 6.95% | 7.18% | 6.80% |
The 30-year fixed-rate mortgages in this week’s survey averaged 0.29 total discount and origination points. Discount points are a way for you to lower your mortgage rate, while origination points are fees a lender charges for originating, reviewing and processing your loan.
Monthly mortgage payment at today’s interest rates
The national median family income for 2024 is $97,800, according to the U.S. Department of Housing and Urban Development, and the median price for an existing home sold in June 2024 was $426,900, a record, according to the National Association of Realtors. Based on a 20 percent down payment and a 6.59 percent mortgage rate, the $2,179 monthly payment represents 27 percent of a typical family’s monthly income.
Will mortgage rates fall?
In the simplest terms, the economy determines whether mortgage rates rise or fall. As the recent stock market sell-off shows, 30-year mortgage rates tend to fall in recessions and economic downturns. The Federal Reserve has the dual mandate of keeping inflation and unemployment low. When inflation is high, the Fed raises its benchmark interest rate, but if it stays too high for too long, it can slow the economy and lead to unemployment. Given recent economic data, many forecasters expect the Fed to begin cutting rates in September.
“We expect mortgage rates to continue to decline throughout the rest of the year, especially if the Fed does indeed implement a series of rate cuts in September,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.
“We are approaching the Fed’s target of 2 percent inflation,” says Michael Becker, sales director at Sierra Pacific Mortgage. “This will allow the Fed to begin cutting interest rates in September, with possible further cuts in November and December.”
To be clear, mortgage rates are not set directly by the Fed, but by investor demand, particularly for 10-year Treasuries. The 30-year fixed mortgage rate is directly tied to the yield on a 10-year Treasury note. When there is uncertainty in the market, investors buy Treasuries, which in turn drives yields (and mortgage rates) down. This can lead to daily fluctuations in mortgage rates as new news arrives.
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Bankrate.com’s nationwide survey of major lenders is conducted weekly. To conduct the nationwide average survey, Bankrate obtains interest rate information from the 10 largest banks and thrifts in 10 major U.S. markets. In Bankrate.com’s nationwide survey, our market research team collects interest rates and/or yields on bank deposits, loans and mortgages. We have conducted this survey the same way for more than 30 years, and because it is always conducted the same way, it allows for accurate national comparison. Our rates differ from other nationwide surveys, particularly Freddie Mac’s rates published weekly. Each week, Freddie Mac surveys lenders on rates and points based on first-lien, conventional mortgages with 80 percent loan-to-value ratios. “The lenders surveyed weekly are a mix of lender types — thrifts, credit unions, commercial banks and mortgage loan companies — and roughly correspond to the amount of mortgage business each type does nationwide,” Freddie Mac says.
