Today’s mortgage rates are slightly lower than yesterday but still remain close to the 6% mark where they have been for the past few weeks.
The average interest rate for a 30-year fixed-rate mortgage is now at 5.89% APR, as reported by Zillow to BW. This is a decrease of two basis points from yesterday and four basis points from a week ago. (Refer to the chart below for more details.) A basis point is equivalent to one one-hundredth of a percentage point.
While the change in rates may seem minimal, if you are in the market for a new home or considering refinancing, it could be a signal to start monitoring rates more closely. Even if rates are not dropping daily, a downward trend may indicate a good time to make a move.
It’s important to note that while the economy operates continuously, markets are closed on weekends. Therefore, the rates you see on Friday are unlikely to fluctuate significantly until Monday.
Average mortgage rates over the last 30 days
📉 When can we expect a drop in mortgage rates?
Mortgage rates are subject to constant fluctuations, influenced by various factors such as inflation reports, job data, Federal Reserve meetings, and global events. Even minor changes in the bond market can impact mortgage rates significantly.
Next week, analysts will closely monitor the Federal Reserve meeting scheduled for Jan. 27-28. It is widely anticipated that the Fed will maintain the federal funds rate, which affects the cost of borrowing for lenders and consequently mortgage rates.
The Federal Reserve has lowered the federal funds rate at the past three meetings, making this potential pause significant. Analysts suggest that this decision could be part of a broader trend at the Federal Reserve, with indications that rates may remain stable for the quarter.
In addition, Treasury Secretary Scott Bessent hinted at a possible announcement regarding the next chair of the Federal Reserve. This development could impact market sentiments and predictions for future monetary policies.
🔁 Is it the right time to refinance?
Considering today’s rates, refinancing could be advantageous if your current rate is 0.5 to 0.75 percentage points higher and you plan to stay in your home long enough to offset closing costs.
Given the current rate environment, it may be worth exploring a refinance if your existing rate is at or above 6.39%.
It’s essential to align your refinancing goals with your financial objectives, whether it’s reducing monthly payments, shortening the loan term, or leveraging home equity for cash. Depending on your preferences, a cash-out refinance may be more suitable than a rate-and-term refinance, provided the overall costs are lower.
For those seeking a lower rate, BW’s refinance calculator can help estimate potential savings and break-even points for refinancing costs.
🏡 Is it time to start house hunting?
The ideal time to begin the homebuying process depends on your financial readiness to afford a mortgage at current rates.
If you have the means to afford a mortgage now, don’t wait for potential rate decreases in the future. Instead, focus on getting preapproved, comparing lender offers, and determining a monthly payment that fits your budget.
BW’s affordability calculator can assist in estimating your monthly payment capacity. If purchasing a new home is not immediate, utilize this time to reduce existing debts and boost your down payment savings. This proactive approach can enhance your financial standing and potentially secure a better interest rate when you are prepared to buy.
🔒 Should I lock in my rate?
If you have received a favorable mortgage quote, it may be wise to consider locking in your rate, especially if your lender offers a float-down option. This feature allows you to benefit from a lower rate if market conditions improve during the lock period.
Rate locks shield you from rate hikes while your loan is being processed, providing peace of mind amidst market volatility.
🤓 Nerdy Tip: Mortgage rates can fluctuate daily and even hourly. If you are content with the offer, feel confident in securing it.
🧐 Why does the online rate differ from my personalized quote?
The advertised rate serves as a sample rate, typically for borrowers with excellent credit, substantial down payments, and payment of mortgage points. This rate may not align with every individual’s financial situation.
In addition to external market factors, your personalized quote considers factors such as location, property type, and overall financial profile. Hence, two individuals with similar credit scores may receive varying rates based on their financial circumstances.
👀 If I apply now, can I secure today’s rate?
Possibly, but personalized rate quotes are subject to change until you finalize a rate lock. Lenders adjust pricing multiple times a day in response to market fluctuations, so securing today’s rate may require timely action.