This has been a tumultuous year for mortgage rates, and it isn’t over yet.
Rates started out 2022 near record lows – around 3% for a 30-year fixed rate loan – but those figures have doubled in the months since, topping 7% for the first time in 20 years. The biggest culprit is inflation, and rates have moved up in anticipation of rate hikes by the Federal Reserve.
This surge in mortgage rates has brought the housing market to a standstill, with home prices starting to drop but homes becoming extremely hard for many buyers to afford. Run today’s mortgage rates through a calculator and see if you can afford a monthly payment, as rates are changing quickly.
Let’s take a look at today’s rates and what they mean for borrowers
What we’re seeing today is a handful of principal mortgage rates have slid downward. Both 30-year fixed and 15-year fixed mortgage rates sank. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) also saw a decline.
The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:
Mortgage Rate Forecast: What Drives Changes in Mortgage Rates?
Inflation has been high this year, with the consumer price index at 7.7% year-over-year in October. That was lower than expected, offering hope that the Federal Reserve’s efforts to raise rates to slow down consumer demand are starting to work. The Fed has raised its key interest rate several times this year, with the latest by 0.75 percentage points in November, but Chairman Jerome Powell indicated the central bank may start to slow down the pace of those increases.
Those factors have both pushed mortgage rates higher this year, from around 3.3% in January to more than 7% at the end of October.
“Inflation is absolutely in the driver’s seat, particularly as it pertains to mortgage rates. Until we get some sustained evidence that inflation is beginning to recede, the upward pressure on mortgage rates will remain,” says Odeta Kushi, deputy chief economist at First American Financial Corporation.
Current Mortgage Rates: Is It a Good Time to Buy a House Right Now?
This year’s dramatic surge in mortgage rates has complicated the math for homebuyers. Mortgage costs are significantly higher than they were just a few months ago, wiping out any savings that would be seen from dropping home prices.
Home prices remain near their all-time highs and are still higher than they were at the same point last year, despite some drops from their peaks earlier in the summer.
The most important thing is to calculate your expected monthly payment and see if it fits your budget. The softening demand for homes could also mean you’re more likely to be able to find a deal or get a seller to agree to concessions, such as paying mortgage points to get you a lower interest rate.
“What I would ask myself is: Can I afford this home and is it the right home that meets me and my family’s needs for at least the next few years, ideally the next several years?” says Jeff Tucker, a senior economist at Zillow.
What to Know About Loans Fees
The catchall term for the fees you pay to get a mortgage is closing costs. This includes lender fees and escrow fees, such as taxes and insurance. These fees vary depending on the size of your loan, but are usually 3% to 6% of your loan balance. Keeping track of your closing costs is crucial because a higher closing cost will result in a higher APR.
Current Mortgage Refinance Rates
Checking in on refinance mortgage rates, today the average rate nationwide for a 30-year fixed refinance shrank, while 15-year fixed Refinance rates grew. If you’ve been considering a 10-year refinance loan, just know average rates didn’t fluctuate.
Take a look at today’s refinance rates:
Current Mortgage Rates.
30-Year Fixed Mortgage Interest Rates
The median interest rate for a standard, 30-year, fixed mortgage is 6.85%, which is a decline of 9 basis points from last week.
15-Year Fixed Mortgage Rates
The median rate for a 15-year fixed mortgage is 6.21%, which is a decrease of 3 basis points compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment is, without a doubt, a much bigger monthly payment than what you’d get with a 30-year mortgage offering the same interest rate. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.
5/1 ARM Interest Rates
A 5/1 ARM has an average rate of 5.49%, a decrease of 5 basis points compared to a week ago.
An ARM is ideal for individuals who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being remarkably higher after a rate adjusts.
For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.
How We Calculate Our Mortgage Rates
NextAdvisor’s mortgage interest rate averages are pulled from Bankrate’s daily rate data.. These overnight rates are based on a specific personal profile, which only includes loans for primary residences where the borrower has a FICO score of 740+. Bankrate is part of the same parent company as NextAdvisor.
The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the country:
Rates as of November 23, 2022.
Mortgage Rate Frequently Asked Questions (FAQ):
How Do I Get the Best Mortgage Rate?
If you’re looking for the absolute best mortgage rate you should focus on two main factors: Credit score, and loan-to-value ratio (LTV)..
To get the lowest interest rate, you’ll need a credit score somewhere between 700-800. Having a credit score above 800 is nice, but will likely have a minimal impact on your rate.
Mortgage providers provide the biggest mortgage rate reductions to borrowers that are deemed less risky. One surefire way to show you’re a less risky borrower is to have a bigger down payment. A down payment of 20% or more will save you money in two ways: with a more favorable mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).
Is It a Good Idea to Lock in My Mortgage Rate Right Now?
Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are historically favorable.
A rate lock will only last for a set amount of time, typically 30-60 days. If you hit a snag during closing and it looks like your rate lock will expire you should talk with your lender. It may be able to extend the rate lock, however, you might have to pay a fee for that privilege.