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Mortgage rates are relatively steady across the board as of Tuesday, May 14, 2024, as the market awaits key inflation and consumer spending data for April, starting with the release of the Producer Price Index today and followed by the Consumer Price Index tomorrow. Data within these reports will show whether there’s progress toward the Fed’s 2% inflation goal that could influence when and how far to cut the benchmark interest rate.
The current average interest rate for a 30-year fixed mortgage is 7.21% for purchase and 7.22% for refinance, down 12 basis points from 7.33% for purchase and down 8 basis points from 7.30% for refinance last Tuesday. For homeowners looking to refinance to a 15-year term, the average rate is 6.80% — up 3 basis points from 6.83% over the past week. The average rate on a 30-year fixed jumbo mortgage is 7.35%.
Mortgage rates for Tuesday, May 14, 2024
30-year fixed rate — 7.21%
20-year fixed rate — 7.10%
15-year fixed rate — 6.71%
10-year fixed rate — 6.80%
5/1 adjustable rate mortgage — 6.87%
30-year fixed FHA rate — 7.01%
30-year fixed VA rate — 7.14%
30-year fixed jumbo rate — 7.35%
Mortgage rates for Tuesday, May 14, 2024
30-year fixed rate — 7.22%
20-year fixed rate — 7.11%
15-year fixed rate — 6.80%
10-year fixed rate — 6.80%
5/1 adjustable rate mortgage — 6.70%
30-year fixed FHA rate — 7.09%
30-year fixed VA rate — 7.73%
30-year fixed jumbo rate — 7.36%
Freddie Mac weekly mortgage report: May 9 — Rates decrease for first time since March
Freddie Mac reports an average 7.09% for a 30-year fixed-rate mortgage, down 13 basis points from last week’s average 7.22%, according to its weekly Prime Mortgage Market Survey of nationwide lenders published on May 9, 2024. The fixed rate for a 15-year mortgage is 6.38%, down 9 basis points from last week’s average 6.47%. These figures are higher than a year ago, when rates averaged 6.35% for a 30-year term and 5.75% for a 15-year term.
Sam Khater, Freddie Mac’s chief economist, says of the May 9 data, “After a five week climb, mortgage rates ticked down following a weaker than expected jobs report,» adding, “An environment where rates continue to hover above seven percent impacts both sellers and buyers. Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated. These elevated house prices add to the overall affordability challenges that potential buyers face in this high-rate environment.”
Freddie Mac updates its Prime Mortgage Market Survey data on Thursday mornings.
Current mortgage rates for May 14, 2024
Mortgage rates are determined by many factors that include inflation rates, economic conditions, housing market trends and the Federal Reserve’s target interest rate. Lenders also consider your personal credit score, the amount available for your down payment, the property you’re interested in and other terms of the loan you’re requesting, like 30-year or 15-year offers.
Because mortgage rates can fluctuate daily, it’s best to lock in a rate when you’re comfortable with the overall conditions of your mortgage or home loan.
Mortgage rates in the news
Mortgage lenders keep a close eye on the benchmark federal funds target interest rate set by the Federal Reserve, the U.S.’s central bank. Called the Fed rate, it’s the benchmark that affects rates on deposit accounts, loans and other financial products. Typically, as the fed rate rises, so do APYs on savings products like CDs, high-yield savings accounts and money market accounts. Mortgage and home loan rates don’t follow the Fed rate as closely, but they do reflect the same elements the Fed evaluates when making decisions on the benchmark — especially inflation — which means as the Fed rate increases, mortgage rates also tend to rise.
The Federal Reserve increased the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic.
May 1, 2024: Fed holds benchmark rate unchanged for sixth time since July 2023
At the conclusion of its third rate-setting policy meeting of 2024 on May 1, 2024, the Federal Reserve left the federal funds target interest rate at a 23-year high of 5.25% to 5.50%, marking the sixth consecutive time the Fed’s held the benchmark rate unchanged since July 2023.
In its post-meeting statement, the Federal Reserve maintained «there has been a lack of further progress toward the 2 percent inflation objective.» The Federal Reserve is focused on a 2% inflation goal that’s ideal for keeping employment high and prices low. Despite speculation in March of three rate cuts by the end of the year, the Fed cautioned in its May statement that its rate-setting committee «does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.»
March inflation data comes in higher than expected, while April jobs report misses mark
Complicating future cuts to the Fed rate is March’s Consumer Price Index data released on April 10 that showed a rise in consumer prices — a widely used indicator for inflation — to 3.5% in March, up from 3.2% in February.
The same week brought with it the latest Producer Price Index, an economic indicator measuring changes over time in the prices producers receive for goods and services — or wholesale inflation. The April 11 data showed a lower rate of growth in March than economists expected, providing modest relief from continued inflation worries.
The May 3 jobs report fell short of employment expectations, showing 175,000 positions added in April — significantly lower than the 315,000 positions added in March — which signals a slowing job market that could relieve inflation worries and set off long-awaited cuts to the Fed rate.
What to expect at the Fed’s June policy meeting
It’s too early to predict what the Federal Reserve will decide at its next policy meeting on June 11 and June 12, 2024, though the Fed’s given no signals as to when it might lower the key interest rate.
The pace of inflation has fallen from a peak of 9.1% in June 2022 to rates that have ranged from 3% and 4% since May 2023. And the latest Employment Situation Summary released on May 3 revealed a dip in the number of workers hired in April, signaling a cooling job market.
April’s Producer Price Index data is due for release today, followed by new Consumer Price Index data tomorrow. Each report could indicate an improvement in the inflation rate, influencing the Fed’s decision on a future rate cut.
The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on June 12, at 2 p.m. ET.
NAR settlement offers ray of hope to summer homebuyers
While high mortgage rates could convince current homeowners to delay selling their properties, resulting in low housing inventory, a major change in the way Americans buy and sell homes may offer a ray of sunshine to summer homebuyers. On March 15, the National Association of Realtors announced it had agreed to a settlement that, if approved by a federal judge, would bring an end to longstanding real estate broker commissions of up to 6% of a home’s purchase price. The settlement isn’t expected to affect mortgage rates, yet it paves the way for consumers to negotiate what they pay for an agent’s services, potentially saving money in the long run.
Dig deeper: When’s the next Federal Reserve meeting? The FOMC — and how it affects your finances
4 top factors that affect your mortgage rate
The difference of even half a percentage point on your interest rate can save you hundreds of dollars a month and thousands of dollars over the life of your mortgage, but the mortgage rate you’re ultimately offered depends on the mortgage you’re interested in, payments you’re willing to pay up front and your overall financial health.
Your credit score. Knowing your credit score can help you shop around for lenders you’re likely to get approval through, as well as understand the type of mortgage for your lifestyle and income. The best mortgage rates go to borrowers with good to excellent credit — typically a FICO credit score of at least 670 — though even with fair credit, you may be able to find a mortgage offering decent rates.
Your down payment. The more money you can put down toward your home, the better it benefits your interest rate. Paying at least 20% of your home’s purchase price up front generally results in a lower interest rate — and you can avoid mortgage insurance, which increases your total cost.
Your loan term. While the 30-year mortgage remains a popular way for Americans to purchase homes, you can find terms of 20 years, 15 years and 10 years. Shorter loan terms usually come with lower interest rates, though with higher monthly payments. Longer mortgage terms can result in smaller monthly payments, though you’ll pay higher total interest over the life of your loan.
Interest rate type. Mortgage rates come with two basic types of rates — fixed and variable. Fixed-rate mortgages offer a consistent interest rate over the life of your loan, whereas adjustable-rate mortgages (ARMs) often start with a lower fixed rate for an agreed-on time and then adjust to a variable rate based on market conditions for the remainder of your term. Choosing between these two rates depends on your financial goals and tolerance for risk.
Frequently asked questions about mortgage rates
What are mortgage lenders?
Lenders are financial institutions that loan money to homebuyers. A lender is different from a loan servicer, which typically handles the operational tasks of your loan, like processing payments, talking directly with borrowers and sending monthly statements.
What does it mean to refinance a mortgage?
Refinancing is a process of trading in your current mortgage to another lender for lower rates and better terms than your current loan. With a refinance, the new lender pays off your old mortgage and you then pay your monthly statements from the new lender.
What is an adjustable-rate mortgage?
An adjustable-rate mortgage — commonly called an ARM — is a type of home loan with a variable rate. Unlike a fixed-rate mortgage, which locks in an interest rate and predictable payments that apply over the full loan term, an ARM starts at an initial fixed rate for a period of three years or longer, after which it adjusts to a higher rate and then further adjusts periodically over the remaining life of the loan.
For a 5/1 adjustable-rate mortgage, the first number indicates the number of years at the fixed rate — or five years — and the second number indicates the rate at which the mortgage rate readjusts after — in this case, each year or annually.
Why are mortgage rates so high?
Mortgage rates are influenced by complicated factors like inflation, employment rates, the bond market and the overall economy. While the Federal Reserve doesn’t set mortgage rates, this central bank of the U.S. sets benchmark rates that indirectly affect rates on financial products like mortgages, personal loans and deposit accounts.
March inflation data came in higher than expectations, which is among the main concerns driving mortgage rates higher in April.
Can I negotiate my mortgage rate?
It’s not likely — lenders consider the market conditions and other financial factors when determining rates. You can, however, ask about how you can reduce costs in other ways when comparing mortgage lenders. For instance, many lenders offer lower rates in exchange for «mortgage points» — upfront fees you pay to your lender. A mortgage point could cost 1% of your mortgage amount, which means about $5,000 on a $500,000 home loan, with each point lowering your interest rate by about 0.25%, depending on your lender and loan.
Editor’s note: Annual percentage yields shown are as of Tuesday, May 14, 2024, at 6:30 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.
Sources
Primary Mortgage Market Survey, Freddie Mac. Accessed May 3, 2024.
Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed May 10, 2024.
U.S. Economic, Housing and Mortgage Market Outlook, Freddie Mac. Accessed April 1, 2024.
Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed April 11, 2024.
Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed April 12, 2024.
Mortgage Industry Insights, Bankrate. Accessed May 14, 2024.
