Mortgage Rates Dip for Second Consecutive Week
After five weeks of steady increases, mortgage rates have finally taken a breather, decreasing for the second week in a row. Although the declines are minimal, it’s a welcome respite for homebuyers.
Current Mortgage Rates
According to the latest data from Zillow, here are the current mortgage rates:
- 30-year fixed: 6.61%
- 20-year fixed: 6.34%
- 15-year fixed: 5.91%
- 5/1 ARM: 6.90%
- 7/1 ARM: 7.04%
- 30-year VA: 6.03%
- 15-year VA: 5.47%
- 5/1 VA: 6.06%
What’s Behind the Rate Decrease?
The Federal Reserve’s decision not to cut the federal funds rate has contributed to the stabilization of mortgage rates. While the Fed has indicated it will be cautious about slashing rates in 2025, it’s still a good time to lock in a rate with a lender and start house hunting before the busy spring buying season kicks in.
Understanding Mortgage Rates
A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. There are two main types of mortgage rates: fixed and adjustable rates. A fixed-rate mortgage locks in your rate for the entire life of your loan, while an adjustable-rate mortgage changes periodically based on economic factors.
Factors Affecting Mortgage Rates
Two categories determine mortgage rates: ones you can control and ones you cannot control. You can control factors like comparing lenders, improving your credit score, and making a larger down payment. On the other hand, economic factors like employment rates and inflation are beyond your control.
Mortgage Refinance Rates
Refinance rates are usually higher than purchase rates. According to Zillow, here are the current refinance rates:
- 30-year fixed: 6.63%
- 20-year fixed: 6.29%
- 15-year fixed: 5.96%
- 5/1 ARM: 7.17%
- 7/1 ARM: 7.03%
- 30-year VA: 6.01%
- 15-year VA: 5.72%
- 5/1 VA: 6.05%
- 30-year FHA: 6.27%
- 30-year FHA: 6.13%
Choosing the Right Mortgage Term
Two popular mortgage terms are 30-year and 15-year fixed-rate mortgages. A 30-year mortgage offers lower monthly payments but higher interest rates, while a 15-year mortgage has lower rates but higher monthly payments.
Shopping for the Best Rate
It’s essential to shop around for the best rate with banks, credit unions, and mortgage lenders. According to 2023 HMDA data, some banks with the lowest median mortgage rates include Citibank, Wells Fargo, and USAA.
Is Now a Good Time to Refinance?
Refinancing could be a good option if you can lock in a rate that’s 1-2% lower than your current mortgage rate. However, it’s crucial to consider your financial goals and break-even point after paying refinance closing costs.
Leave a Reply