Jamie Spencer
Mortgage rates climbed again this week, leaving homeowners and potential buyers wondering whether it’s the right time to take action. According to Freddie Mac, the national average 30-year fixed mortgage rate increased by 12 basis points to 6.44%, while the 15-year fixed rate saw a larger jump, rising by 22 basis points to 5.63%. These increases may make refinancing less attractive for homeowners in the short term, but for those considering purchasing a home, the current rates might still present an opportunity.
Current Mortgage Rates Overview
Despite the recent rate hikes, the year-over-year 30-year mortgage rate is down by 1.19%, and it’s currently 38 basis points below its 52-week average. Similarly, the 15-year fixed rate is 1.29% lower than it was last October and 45 basis points under its 52-week average. For those planning to buy a house, these figures suggest that while rates have increased in the short term, the overall trend could still favor buyers looking for more favorable mortgage options.
As of today, the current mortgage rates are as follows, based on Zillow data:
- 30-year fixed: 6.19%
- 20-year fixed: 6.03%
- 15-year fixed: 5.53%
- 5/1 ARM: 6.78%
- 7/1 ARM: 6.90%
- 30-year VA: 5.55%
- 15-year VA: 5.08%
- 5/1 VA: 5.79%
- 5/1 FHA: 4.85%
These rates represent national averages rounded to the nearest hundredth and offer insight into what homebuyers and homeowners can expect.
Refinancing: Should You Wait?
If you’re a homeowner thinking about refinancing, the current environment suggests waiting might be wise. Refinance rates are typically higher than purchase rates, and today’s numbers reflect that trend. According to Zillow, the current refinance rates include:
- 30-year fixed: 6.31%
- 20-year fixed: 6.28%
- 15-year fixed: 5.67%
- 5/1 ARM: 6.58%
- 7/1 ARM: 6.49%
- 30-year VA: 5.59%
- 15-year VA: 5.23%
- 5/1 VA: 5.06%
- 30-year FHA: 5.43%
- 15-year FHA: 5.27%
- 5/1 FHA: 4.84%
Experts believe that mortgage rates will likely decrease in 2025 as the Federal Reserve is expected to cut rates next year, which could make refinancing more attractive at that time. If you’re not in a hurry to refinance, waiting until rates decrease could be a smart move.
Fixed vs. Adjustable-Rate Mortgages: Which Is Right for You?
Choosing between a fixed-rate mortgage and an adjustable-rate mortgage (ARM) depends on your financial goals and how long you plan to stay in your home.
- Fixed-Rate Mortgages: A fixed-rate mortgage locks in your rate for the entire loan term, providing stability and predictability in your monthly payments. If you prefer long-term security and a consistent payment schedule, a 30-year or 15-year fixed-rate mortgage might be a better choice for you.
- Adjustable-Rate Mortgages (ARM): An ARM starts with a fixed rate for a set period—like 5 or 7 years—before adjusting annually based on market conditions. If you plan to sell or refinance before the fixed-rate period ends, an ARM could offer lower initial payments. However, given that current ARM rates are comparable to fixed rates, it’s worth comparing your options before deciding.
For example, today’s 5/1 ARM rates are close to 30-year fixed rates at 6.78%, and 7/1 ARMs stand at 6.90%. Given this minimal difference, you may find the stability of a fixed rate to be more attractive unless you plan to sell within a few years.
When Will Mortgage Rates Go Down?
While mortgage rates have increased over the past few weeks, they are significantly lower than they were at this time last year. According to Freddie Mac, the national average 30-year mortgage rate has dropped by 1.19% since October 2023. Economists expect that rates will continue to trend downward through 2024 and into 2025, with the Federal Reserve likely cutting the federal funds rate next year. This could lead to lower mortgage rates and present more favorable conditions for both buying and refinancing.
Act Now, or Wait for 2025?
For prospective homebuyers, today’s mortgage rates—though rising—are still lower compared to last year’s rates, making it an opportune time to buy. However, if you’re a homeowner considering refinancing, waiting until 2025 when rates are expected to decrease might be a better financial decision. As always, it’s important to assess your personal financial situation and goals when deciding whether to lock in a mortgage rate now or wait for a potential rate drop.
