Mortgage rates experienced another increase today amidst ongoing uncertainty surrounding the Federal Reserve’s decisions.
The average interest rate for a 30-year fixed-rate mortgage rose to 6.15% APR, based on data from Zillow provided to BW. This marks a seven basis point increase from yesterday and an 18 basis point increase from a week ago. (Refer to the chart below for detailed information.) A basis point represents one one-hundredth of a percentage point.
Although the Fed reduced rates on Wednesday, mortgage rates had already declined before the official announcement. By the time the 25-basis-point cut was confirmed, rates had largely adjusted.
Following the post-announcement press conference where Fed chair Jerome Powell highlighted that a December rate cut is not guaranteed, rates began to rise. This shift was a result of market reactions to Powell’s statements.
Despite headlines suggesting lower rates post-Fed announcement, many are referring to Freddie Mac’s weekly rates survey. This survey, conducted from Thursday to Wednesday, may not reflect the most recent market changes accurately.
Freddie Mac’s survey, being a standard benchmark, may not capture immediate rate fluctuations following significant events like the Fed press conference. This discrepancy was evident this week, with rates increasing post-Fed announcement.
Due to market closures over the weekend, Friday’s rates are likely to remain stable until Monday.
Average mortgage rates, last 30 days
📉 When will mortgage rates drop?
Mortgage rates are constantly changing, influenced by various factors such as inflation reports, job data, Fed decisions, and global events. Even minor shifts in the bond market can impact mortgage rates significantly.
With the government shutdown affecting data releases, the focus would have been on the Personal Consumption Expenditures Index (PCE) if the shutdown hadn’t occurred. PCE data, crucial for the Fed’s inflation assessment, would have played a role in shaping their decisions for December. However, with the delay in data release due to the shutdown, market dynamics may alter.
In the absence of federal data next week, attention will likely shift to the ADP employment report scheduled for Nov. 5. This private-sector report, significant during the shutdown, could impact Fed decisions based on labor market trends.
🔁 Should I refinance?
Considering refinancing is beneficial if today’s rates are at least 0.5 to 0.75 percentage points lower than your current rate, provided you intend to stay in your home long enough to offset closing costs.
Given the current rate environment, contemplating a refinance makes sense if your existing rate is around 6.65% or higher.
It’s essential to align your refinancing goals with your financial objectives, whether it’s reducing monthly payments, shortening the loan term, or tapping into home equity through a cash-out refinance as long as the overall costs are lower than alternative financing options.
For those seeking a lower rate, BW’s refinance calculator can assist in estimating potential savings and gauging the breakeven point for refinancing costs.
🏡 Should I start shopping for a home?
The ideal time to begin house hunting is when you can comfortably afford a mortgage at current rates. Timing the market for lower rates shouldn’t be the primary concern, as refinancing remains an option in the future. Focus on getting preapproved, comparing lender offerings, and determining a monthly payment that aligns with your budget.
Utilize BW’s affordability calculator to estimate your potential monthly payment. If purchasing a new home isn’t an immediate option, focus on reducing existing debts and increasing your down payment savings. Not only will this improve your financial health for a future mortgage, but it may also secure a better interest rate when you’re ready to buy.
🔒 Should I lock my rate?
If you’ve received a rate quote that meets your expectations, consider locking in your mortgage rate, particularly 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 processes, offering stability amid market volatility.
🤓 Nerdy Reminder: Mortgage rates can fluctuate daily, even hourly. If you’re satisfied with your rate, don’t hesitate to secure it.
🧐 Why is the rate I saw online different from the quote I received?
The advertised rate is typically a sample rate, relevant for borrowers with excellent credit, substantial down payments, and payment of mortgage points. This may not align with all individual circumstances.
Apart from external market factors, the personalized quote you receive is influenced by factors like:
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Location and property type
Even individuals with similar credit scores can receive varying rates based on their overall financial profiles.
👀 If I apply now, can I get the rate I saw today?
Possibly, but even personalized rate quotes are subject to change until you finalize the lock-in. Lenders adjust rates multiple times a day based on market fluctuations.