Today's Mortgage Rates - 03/29/2024
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Rates Kick Higher, Will Retreat Some
As expected, mortgage rates pushed higher this week, even as the Fed made no change to short-term interest rates at its March meeting.
As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage rose by thirteen basis points (0.13%), flaring back up to 6.87% and erasing nearly all of the previous week's decline.
Average offered rates for fifteen-year fixed-rate mortgages also moved upward in the latest survey, posting an increase of five basis points (0.05%), stopping at a rate of 6.21% The change in direction broke a three-week slide in the average offered rate for the most common short-term mortgage.
Relative to a long-term fixed-rate mortgage, the offered rate for the most popular ARM was a little bit more attractive this week. The Mortgage Bankers Association reported that the average offered rate for first five years of a 5/1 hybrid ARM declined by five basis points (0.05%) in their latest survey week, slipping to 6.33%. This expanded the gap between the 30-year FRM and Hybrid 5/1 ARM to 54 basis points, and that half-percentage-point break in the rate would provide a homebuyuer with about a $107 per month savings. In addition, over he first five years of the loan, the 5/1 ARM would see a borrower pay $8,141 less in interest cost. While these figures aren't huge, every little bit helps in a housing market as expensive as is today's.
If you're interested learning the advantages (and pitfalls) of ARMs, you should read HSH's comprehensive Guide to Adjustable Rate Mortgages.
Although mortgage rates moved higher this week, there are already signs that the increase is fading. After less-than-favorable readings on inflation for January and February, investors were becoming concerned that the Fed's December outlook for three cuts in short-term rates this year might have changed, delaying the date of the first change in policy.
However, the Fed did not change its forecast, and while nearly a third of the year has already fallen behind us, the expectation for three cuts in rates remains in place. This despite the Summary of Economic Projections now forecasting both somewhat stronger growth and core inflation that isn't expected to retreat as quickly as it was just a few months ago.
With the December outlook reaffirmed, investors relaxed somewhat. Stock markets rallied and interest rates eased a little, setting the state for lower mortgage rates next week.
Fed Chair Powell did note that the Fed is planning to slow the pace of its balance sheet "runoff" before long. The Fed has shrunk its bond holdings by $1.5 trillion already, and while it isn't yet done with it's "Quantitative Tightening" program, the central bank is looking for a slower, smoother transition to whatever its (undisclosed) goal for holdings may be. Since MBS reductions have fallen well short of monthly targets since QT's inception, we think all of the change in runoff will come on the Treasury side, at least to start.
Mortgage rates have eased a little after the close of the Fed meeting, and this should see them in the market for at least 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.
Current mortgage rates
Week | 30-year-Fixed | 15-year-Fixed |
---|---|---|
03/28 | 6.790% | 6.110% |
03/21 | 6.870% | 6.210% |
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% |
Mortgage Choices at a Glance
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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.