With half of 2024 gone, it's time for our Mid-year review of HSH's 2024 Mortgage and Housing Market Outlook. Have a look and see how we're doing!

With half of 2024 gone, it's time for our Mid-year review of HSH's 2024 Mortgage and Housing Market Outlook. Have a look and see how we're doing!

Today's Mortgage Rates - 07/19/2024

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Lower Mortgage Rates Greet Homebuyers This Week

Flattening inflation and cooler economic growth continued to help mortgage rates ease this week.

As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) decreased by another twelve basis points (0.12%) to 6.77%, leaving the average rate for the most popular mortgage term at its lowest point since mid-February.

Average offered rates for 15-year fixed-rate mortgages also dropped by a dozen eight basis points (0.12%). Most commonly used by homeowners who are refinancing existing loans, the average rate for the most prevalent shorter-term mortgage now stands at 6.05%, better than a five-month low.

A 5/1 ARM might offer a homebuyer slightly lower-cost alternative to a long-term fixed-rate mortgage, but the difference in rate between 30-year FRMs and 5/1 ARMs has not been all that compelling of late. The Mortgage Bankers Association reported that the initial fixed interest rate on a hybrid 5/1 ARM was 6.33%, an eleven basis point (0.11%) increase from the prior week's average rate. At 44 basis points, the narrow gap between rates for a 30-year FRM and those for a 5/1 ARM means that an ARM is a less compelling choice for potential homebuyers at the moment.

Even when the call of an ARM is compelling, it's important to remember that ARMs are not a set-it-and-forget-it loan product. If you're interested in learning the advantages (and drawbacks) of ARMs, you should read HSH's comprehensive Guide to Adjustable Rate Mortgages.

Amid more favorable inflation data and a more muted period of economic growth, Federal Reserve officials are beginning to become more comfortable with the idea that they will be lowering rates soon, at least according to the tenor of comments made by Feb members in recent days. While there is virtually a zero chance that a rate cut will come as soon as the end-of-the-month FOMC meeting, September appears to be very much "on the table", with only another fair inflation report or two needed as additional evidence.

Investors shifting their positions to become better aligned with the chances for lower rates by summer's end have helped the yields and bond prices that underpin fixed mortgage rates to decline, so down fixed mortgage rates have gone. To be sure, they still remains above the lowest levels of 2024 and do seem to have stalled around present levels of late, but at least they are moving in the right direction for potential homebuyers at the moment.

Based on how the bond markets have acted this week, mortgage rates seem most likely to be stable over the next few days with perhaps a touch of downward bias.

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
07/18 6.770% 6.050%
07/11 6.890% 6.170%
07/03 6.950% 6.250%
06/27 6.860% 6.160%
06/20 6.870% 6.130%
06/13 6.950% 6.170%
06/06 6.990% 6.290%
05/30 7.030% 6.360%
05/23 6.940% 6.240%
05/16 7.020% 6.280%
05/09 7.090% 6.380%
05/02 7.220% 6.470%

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
  • 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
  • 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

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