Could a Fed rate cut help mortgage rates fall? Mortgage rates today, December 17, 2024

In 2024, potential homebuyers watch Mortgage rates It rises, falls, then rises again. Many hope that the housing market will open up when… Federal Reserve Interest rate cuts finally began in September.

After the mortgage Rates They remained elevated due to a convergence of macroeconomic factors: strong economic data and concerns about the potential inflationary policies of President-elect Donald Trump. Mortgage rates have been rising over the past couple of months but are off to a better start in December.

Average mortgage rates today

Fixed rate for 30 years	6.79%	(-0.01) ↓
15 years at a fixed price	6.11%	(-0.03) ↓
Jumbo fixed rate for 30 years	6.96%	(0.00)
1/5 ARM	6.43%	(+0.04) ↑
Fixed rate for 10 years	6.02%	(+0.02) ↑

Average mortgage rates today on December 17, 2024, compared to one week ago. We use rate data collected by Bankrate as reported by lenders across the United States. See all today’s mortgage rates

The average interest rate on a 30-year fixed mortgage is 6.79% today, down -0.01% over the past week. The average rate for a 15-year fixed mortgage is 6.11%, which represents a decrease of -0.03% compared to last week.

With inflation slowing and the labor market weak, the Fed is scheduled to make another interest rate cut of 0.25% at its policy meeting scheduled for December 18. Experts say this may be the last reduction we see for a while. Depending on how the next administration’s economic policies are implemented, Mortgage rates The decline may continue into 2025, although interest rates are unlikely to fall below 6% for a while.

Check CNET Money Weekly mortgage rate forecast For a more in-depth look at what’s next for Fed rate cuts, employment data and inflation.

Recent mortgage rate trends

Although the Federal Reserve influences the direction of mortgage rates, it… It does not specify them directly. In fact, mortgage rates tend to move ahead of the Fed, fluctuating daily in response to various economic indicators, including inflation and employment data, changes in the bond market, investor expectations, and geopolitical risks.

At the end of this summer, Mortgage rates Interest rates fell due to troubling economic indicators (high unemployment rates) that led investors to believe that the Fed would begin cutting interest rates aggressively. In the run-up to the central bank cutting interest rates by half a percentage point on September 18, mortgage interest rates reached their lowest levels in almost two years.

But shortly after the Fed’s September policy meeting, interest rates began to rise due to strong economic indicators and the election of Donald Trump, whose proposed economic policies could lead to higher deficits and higher inflation.

He said the prospect of increased government spending does not bode well for long-term interest rates, such as 30-year fixed mortgages. Nicole Rothsenior vice president of the movement-backed Roeth team.

Although a 0.25% Fed rate cut this month seems likely, it will not lead to an equal or immediate decline in mortgage rates. Moreover, the Fed is likely to slow the pace of interest rate cuts in 2025 Sam Williamsonchief economist at First American Financial Corporation, said that would continue to put upward pressure on mortgage rates.

For a look at the mortgage rate movement over the past four years, see the chart below.

Will mortgage rates fall this year?

Today’s homebuyers have less room in their budget to afford a home due to higher mortgage rates and rising home prices. Limited housing stock Low wage growth also contributes Affordability crisis And keep mortgage demand low.

The next direction for mortgage rates depends on how the economy performs in the coming weeks and months. Strong economic data usually translates into higher mortgage rates. The opposite is true when we get weaker data, such as higher unemployment rates or slower inflation.

In our Mortgage forecasts 2025experts have determined an approximate range of mortgage loans depending on the likely economic outcomes.

If inflation trends are lower and The labor market is weakeningMortgage rates will have room to decline, likely reaching the 5% range. But if Trump’s economic policies cause inflation to reheat, that could prompt the Fed to delay additional interest rate cuts. In this scenario, mortgage rates could easily remain high or exceed 7%.

Here’s a look at where some major housing authorities expect average mortgage interest rates to land.

How do I choose a mortgage term?

Every mortgage has a loan term, or repayment schedule. The most common mortgage terms are 15 and 30 years, although 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 locked in only for a certain period of time (usually five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home long-term, but adjustable-rate mortgages may offer lower interest rates up front.

30-year fixed rate mortgages

The average rate for a 30-year fixed mortgage is 6.79% today. A 30-year fixed mortgage is the most common loan term. The interest rate is often higher than a 15-year mortgage, but you will have a lower monthly payment.

15-year fixed rate mortgages

Today, the average rate for a 15-year fixed mortgage is 6.11%. Although you’ll have a larger monthly payment than a 30-year fixed mortgage, a 15-year loan typically comes with a lower interest rate, allowing you to pay less in interest over the long term and pay off your mortgage sooner.

5/1 adjustable rate mortgages

The 5/1 ARM rate is averaging 6.43% today. You’ll typically get a lower introductory interest rate at a 5/1 ARM for the first five years of your mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your home within five years, an ARM may be a good option.

Calculate your monthly mortgage payment

Obtaining a mortgage should always be based on your financial situation and long-term goals. The most important thing is to set a budget and try to stay within your means. CNET Mortgage Calculator Below can help homebuyers prepare for their monthly mortgage payments.

How can I get the lowest mortgage rates?

Although mortgage rates and home prices are rising, the housing market will not be difficult forever. It’s always a good 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.

1. Save for a larger down payment: Although a 20% down payment is not required, a larger down payment means a smaller mortgage, which will help you save on interest.
2. Boost your credit score: You can qualify for a conventional mortgage with a credit score of 620, but a higher score of at least 740 will get you better rates.
3. Debt repayment: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not taking on other debt will put you in a better position to handle your monthly payments.
4. Loans and research assistantships: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help you with your down payment and closing costs.
5. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate that suits your situation.

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