X

Thinking about buying a home this spring? Check out the latest update to the income needed to buy a median-priced home in the top 50 metro areas.

Thinking about buying a home this spring? Check out the latest update to the income needed to buy a median-priced home in the top 50 metro areas.

Today's Mortgage Rates - 03/18/2024

Personalize the results below to get your best mortgage rate

Personalize your quotes and see mortgage rates just for you.
Displaying Today's Mortgage Rates for a $450,000 Refinance loan.
Refinance
Your loan amount is greater than the value of the property, a condition known as being "underwater".
Sorry, no listings found currently for the selected values

Rates Ease, But Already Rebounding Again

Lower mortgage rates greeted mortgage shoppers this week.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage decreased by fourteen basis points (0.14%), edging down to 6.74%. The decline left the rate for the most popular mortgage type and term at a four-week low.

Average offered rates for fifteen-year fixed-rate mortgages posted a third consecutive decline this week, sporting a fall of six more basis points (0.06%). This left the average offered rate for the most common short-term mortgage at 6.16%, a three-week low.

Long-term fixed mortgage rates hovering a little further below the 7% mark may provide less of an enticement for homebuyers to consider an alternative mortgage product. The Mortgage Bankers Association reported that the average offered rate for first five years of a 5/1 hybrid ARM was unchanged in their latest survey week, holding stead at 6.38%. While the gap between a long-term fixed-rate mortgage and the most popular ARM isn't all that large, a homebuyer with a $300,000 loan amount who selects this ARM would have a monthly payment about $71 per month less and save about $5,426 in interest cost over the first five years of the loan.

If you're interested learning the advantages (and pitfalls) of ARMs, you should read HSH's comprehensive Guide to Adjustable Rate Mortgages.

While mortgage rates have eased somewhat more this week, it doesn't appear that the downtrend has much by way of momentum. The recent economic reports have detailed a still-strong labor market and inflation pressures that have firmed up a bit more in early 2024, and this combination is enough to reverse the recent trend for rates.

That said, the overall pattern isn't so changed as to derail the Fed from its likely path of starting to trim short-term interest rates later this year, at least not yet. The next Fed meeting takes place next Tuesday and Wednesday and includes an updated Summary of Economic Projections, so we're likely to get greater clarity into the Fed's outlook for the economy and interest rates for the next few months at least.

The long-term bond yields that influence mortgage rates have flared higher again of late, returning to roughly where they were at the end of February. If they should hold there, the recent decline in mortgage rates will be erased. Expect to see somewhat higher mortgage rates in the market now and over the next few days.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.

Week 30-year-Fixed 15-year-Fixed
03/14 6.740% 6.160%
03/07 6.880% 6.220%
02/29 6.940% 6.260%
02/22 6.900% 6.290%
02/15 6.770% 6.120%
02/08 6.640% 5.900%
02/01 6.630% 5.940%
01/25 6.690% 5.960%
01/18 6.600% 5.760%
01/11 6.660% 5.870%
01/04 6.620% 5.890%
12/28 6.610% 5.930%

Mortgage Choices at a Glance

Loan type/terms Fixed 30 years Fixed 15 years/
20 Years
Hybrid ARM Traditional ARM Balloon Mortgage
Rate changes
  • Never; Fully fixed for entire term
  • Never; Fully fixed for entire term
  • Usually after fixed period of 3, 5, 7 or 10 years
  • After that, annual change typical
  • Fully variable
  • Typically changing at one-year intervals
  • Some have shorter change intervals
  • Never; Fully fixed for entire term
Benefits
  • Low, stable payment
  • Usually easiest qualification
  • Stable payments
  • Builds equity faster
  • Lower total interest costs than 30-year term
  • Lower rates than fully fixed-rate mortgage
  • Can sometimes borrow larger loan amount for same income
  • Can have lowest interest rates
  • Qualification may not depend upon today's interest rate
  • Often has lower interest rate/monthly payment over balloon period than fixed rate
  • Similar to hybrid ARM
Drawbacks/Risks
  • Can have highest total interest cost over time
  • User may "buy" more rate stability than actually needed, increasing cost
  • Requires higher income to qualify
  • Less affordable monthly payment
  • Funds commited to payment cannot be used elsewhere
  • Stable payment for a number of years, then unpredictable
  • Rates can jump by as much as 6 percentage points at first adjustment
  • Payments fluctuate at each rate change
  • Unpredictable, rates can change as much as 2 percentage points at each adjustment
  • Loan fully due and payable when balloon period ends
  • Must be paid off or refinanced in unknown market conditions
Alternative strategy
  • Consider Hybrid ARM with appropriate fixed period
  • Consider 30-year term and prepaying loan to preserve cash-flow flexibility
  • Consider Fixed rate mortgage or longest possible fixed period, if loan hold period not known
  • Consider Hybrid ARM to ameliorate rate and payment risks for a given period
  • Consider Hybrid ARM to ensure continued loan availability
These may be useful for...
  • Purchasing a home
  • First-time homebuyers
  • Refinancing to improve cash flow/lower payment
  • Refinancing to lower total interest cost
  • Retiring mortgage more quickly
  • Building or rebuilding equity more quickly
  • Purchasing or refinancing when time horizon is seven years or shorter, and where borrower can handle increase in monthly payments
  • Purchasing or refinancing when interest rates are near top of cycle, and are likely to fall, or sale or refinance is anticipated within three years
  • Purchasing or refinancing when time horizon is three years or longer and home will be sold prior to end of balloon period
Consider if
  • Buying or refinancing a home and planning on owning for longer than 10 years
  • Buying second home
  • Refinancing to build equity
  • Paying off mortgage before life event (retirement, etc)
  • Buying a home and expect to move before fixed period ends, or know income will rise to offset payment risk, even in worst-case scenario
  • Buying or refinancing when income can handle frequent payment changes and worst-case scenario for rates over a four-year period
  • Buying a home and expect to move before balloon period ends, or have resources to pay off mortgage if refinance not available
When shopping, ask about
  • "Full cost" vs. "No cost" refinances, prepaying loan to shorten term if desired
  • If 20-year term makes payment too high, whether 25-year term is available
  • Interest rate caps, for first and subsequent adjustments, worst-case scenario
  • A history of the Index the loan is keyed off, margin and caps
  • Whether or not there is any built-in refinancing option when the balloon period ends
Useful tools & resources

Latest Mortgage Rate Analysis

HSH's longer-range outlook for mortgage rates, where we review our last forecast,discuss current market influences and provide our expectations for mortgage rates over the next nine weeks.

Mortgage Calculators

Mortgage rates and more

Add to Homescreen?
X
X
Install this web app on your phone :tap and then Add to homescreen