Could a Fed Rate Cut Help Mortgage Rates Fall? Today’s Mortgage Rates, Dec. 17, 2024
In 2024, potential homebuyers pay attention to mortgage interest rate Up, down, then up again. Many hope the housing market will open up when the economy recovers Fed Rate cuts finally began in September.
Pay off the mortgage Rate Inflation remains high due to a combination of macroeconomic factors: strong economic data and concerns about President-elect Donald Trump’s potential inflationary policies. Mortgage rates have soared over the past two months, but December is off to a better start.
Today’s average mortgage rates
| 30-year fixed rate | 6.79% | (-0.01) ↓ |
|---|---|---|
| 15-year fixed interest rate | 6.11% | (-0.03) ↓ |
| 30-year fixed-rate jumbo bond | 6.96% | (0.00) |
| 5/1 arm | 6.43% | (+0.04) ↑ |
| 10-year fixed rate | 6.02% | (+0.02) ↑ |
Average mortgage rates today, December 17, 2024, compared to one week ago. We use interest rate data collected by Bankrate as reported by lenders across the United States. See all today’s mortgage rates
The average 30-year fixed mortgage rate today is 6.79%, down -0.01% from last week. The average 15-year fixed mortgage rate is 6.11%, down -0.03% from a week ago.
With inflation slowing and the job market weakening, the Federal Reserve will cut interest rates again by 0.25% at its policy meeting on December 18. Experts say this could be the last rate cut we see for a while. Depends on how the economic policies of the next government are implemented, mortgage interest rate Interest rates may still fall through 2025, although rates are unlikely to fall below 6% for some time.
View CNET Finance Weekly Mortgage Rate Forecast Get a closer look at the Fed’s next rate cuts, labor data and inflation.
Recent Mortgage Rate Trends
Although the Fed affects the direction of mortgage rates, it don’t set them directly. In fact, mortgage rates tend to lead the Fed and fluctuate daily based on a variety of economic indicators, including inflation and labor data, changes in the bond market, investor expectations and geopolitical risks.
At the end of this summer, mortgage interest rate Stocks tumbled as worrisome economic indicators, including rising unemployment, led investors to believe the Federal Reserve would begin slashing interest rates. Mortgage rates had reached their lowest point in about two years before the central bank cut interest rates by half a percentage point on September 18.
But rates began to edge higher soon after the Fed’s September policy meeting, driven by strong economic indicators and the election of Donald Trump, who proposed economic policies that could lead to higher deficits and higher inflation.
The prospect of increased government spending does not bode well for longer-term interest rates, such as 30-year fixed mortgages, he said Nicole RuthSenior Vice President, Rueth Team Powered by Movement.
While the Fed may cut interest rates again by 0.25% this month, that won’t result in an equivalent or immediate drop in mortgage rates. In addition, the Federal Reserve may slow down the pace of interest rate cuts in 2025. Sam WilliamsonThat will keep upward pressure on mortgage rates, said Senior Economist at First American Financial.
To see how mortgage rates have changed over the past four years, see the chart below.
Will mortgage interest rates drop this year?
As mortgage rates rise and home prices rise, today’s homebuyers have less room in their budgets to afford the cost of a home. Limited housing inventory Low wage growth also leads to affordability crisis And keep mortgage demand down.
Where mortgage rates go next depends on how the economy performs in the coming weeks and months. Strong economic data typically translates into higher mortgage rates. The opposite is true when we get weaker data, such as rising unemployment or cooling inflation.
in our 2025 Mortgage ForecastExperts have outlined a broad range of mortgage loans based on potential economic outcomes.
If inflation trends downward and Weak labor marketmortgage interest rates will have some room to fall, possibly to the 5% range. But if Trump’s economic policies lead to a renewed rise in inflation, it could prompt the Fed to delay further rate cuts. In this scenario, mortgage rates could easily remain high or rise above 7%.
Here’s where some major housing authorities expect average mortgage rates to be.
How do I choose a mortgage term?
Every mortgage has a loan term or payment schedule. The most common mortgage terms are 15 and 30 years, but 10, 20 and 40 year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the life of the loan, providing stability. With an adjustable-rate mortgage, the interest rate is fixed only for a certain period of time (usually five, seven, or 10 years), after which the interest rate adjusts annually based on market conditions. A fixed-rate mortgage is a better choice if you plan to stay there long-term, but an adjustable-rate mortgage may offer a lower upfront interest rate.
30-year fixed-rate mortgage
30-year fixed mortgage rates currently average 6.79%. A 30-year fixed mortgage is the most common loan term. It generally has a higher interest rate than a 15-year mortgage, but the monthly payments are lower.
15-year fixed-rate mortgage
Today, the average interest rate on a 15-year fixed mortgage is 6.11%. Although your monthly payments are higher than a 30-year fixed mortgage, 15-year loans typically have lower interest rates, allowing you to pay less interest and pay off your mortgage faster in the long run.
5/1 Adjustable Rate Mortgage
The average interest rate on 5/1 ARMs today is 6.43%. You’ll typically get a low introductory rate (5/1 ARM) for the first five years of your mortgage. But after this period, you can pay more, depending on how the rates adjust each year. If you plan to sell or refinance your home within five years, an ARM may be a good option.
Calculate your monthly mortgage payment
Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to create a budget and try to live within your means. CNET’s mortgage calculator The following can help homebuyers prepare for their monthly mortgage payments.
How can I get the lowest mortgage rate?
Despite high mortgage rates and home prices, the housing market won’t remain unaffordable forever. Now is a great time to save for a down payment and improve your credit score to help you get a competitive mortgage rate when the time is right.
- Save more on your down payment: While 20% down is not required, a larger down payment means a smaller mortgage, which will help you save money on interest.
- Improve your credit score: A credit score of 620 is enough to qualify for a conventional mortgage, but a higher credit score of at least 740 will get you a better interest rate.
- Pay off debt: Experts recommend a debt-to-income ratio of 36% or lower to help you qualify for the best rates. Not taking on other debt will allow you to better handle your monthly payments.
- Research Loans and Aid: Government-sponsored loans have more flexible borrowing requirements than traditional loans. Some government funding or private programs can also help you with your down payment and closing costs.
- Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you get the best mortgage rate for your situation.
