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Average 30-year fixed mortgage rates rose slightly this week, according to Freddie Mac. Rates have risen more than 3 percentage points so far this year but have recently leveled off. So far, 30-year fixed rates have been stable below 7%.
“Mortgage rates slowed their upward trajectory this week,” Sam Khater, chief economist at Freddie Mac, said in a news release. “The 30-year fixed-rate mortgage is still just shy of seven percent and is negatively impacting the housing market in the form of declining demand. Additionally, homebuilder confidence is down by half than it was just six months ago and construction, particularly single-family home construction, continues to slow.
The housing market has been slowing down for some time as high mortgage rates combined with high prices have pushed many buyers out of the market. After two years of unprecedented increases, house price growth has begun to slow. On a month-over-month basis, prices actually fell in July, according to the S&P Case-Shiller home price index.
Slightly lower home prices coupled with declining demand may bring some relief to buyers who can still afford to stay in the market. More mortgage borrowers are also opting for adjustable rate mortgages instead of fixed rates, since ARMs typically have lower introductory rates. All of these factors combined can help hopeful homebuyers achieve some affordability in an increasingly unaffordable market.
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Use our free mortgage calculator to see how current mortgage rates would affect your monthly payments. By entering different rates and terms, you’ll also understand how much you’ll pay over the entire life of your mortgage.
Your estimated monthly payment
- paying a 25% a higher down payment would save you $8,916.08 on interest charges
- Reduce the interest rate on 1% I would save you $51,562.03
- Paying an additional $500 each month would reduce the length of the loan by 146 months
Click “More Details” for tips on how to save money on your mortgage over the long term.
30-year fixed mortgage rates
The current average 30-year fixed mortgage rate is 6.94%, according to Freddie Mac. This is the highest rate since 2002.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change over the life of the loan.
The long term of 30 years allows you to spread your payments over a long period of time, which means you can keep your monthly payments lower and more manageable. The trade-off is that you will have a higher rate than you would with shorter terms or adjustable rates.
15-year fixed mortgage rates
The average 15-year fixed mortgage rate is 6.23%, an increase from the previous week, according to data from Freddie Mac. The last time this rate exceeded 6% was in 2008.
If you want the predictability that comes with a fixed rate but want to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good option for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you will have a higher monthly payment than with a longer term.
Adjustable Mortgage Rates 5/1
The 5/1 average adjustable mortgage rate is 5.71%, a decrease from the previous week.
Adjustable-rate mortgages can seem very attractive to borrowers when rates are high, because the rates on these mortgages are often lower than fixed mortgage rates. A 5/1 ARM is a 30-year mortgage. For the first five years, you will have a fixed rate. After that, your rate will be adjusted once a year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than you started with.
If you’re considering an ARM, make sure you understand how much your rate could increase each time it adjusts and how much it could ultimately increase over the life of the loan.
Are mortgage rates going up?
Mortgage rates started rising from record lows in the second half of 2021 and have risen significantly so far in 2022.
In the last 12 months, the Consumer Price Index increased by 8.2%. The Federal Reserve has been working to control inflation and is expected to raise the target federal funds rate two more times this year, following hikes at its previous five meetings.
Although not directly tied to the fed funds rate, mortgage rates sometimes rise as a result of Federal Reserve rate increases and investor expectations about how those increases will affect the economy.
Inflation remains high, but has started to slow, which is a good sign for mortgage rates and the broader economy.
How do I find personalized mortgage rates?
Some mortgage lenders allow you to customize your mortgage rate on their websites by entering your down payment amount, zip code, and credit score. The resulting rate isn’t set in stone, but it can give you an idea of what you’ll pay.
If you’re ready to start buying homes, you can apply for pre-approval with a lender. The lender does a hard credit check and looks at the details of your finances to secure a mortgage rate.