Today's Mortgage Rates - 12/05/2023
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Rate Downtrend Continues
Fixed mortgage rates posted another decline this week, a trend that began at the turn of November.
As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage decreased by seven more basis points (0.07%), landing at 7.22%. While still quite pricey, 30-year mortgage rates are now at their lowest point in 10 weeks.
Shorter-term fixed mortgage rates also declined again, making it a four-for-four trend. The eleven basis point (0.11%) drop a conforming 15-year fixed-rate mortgage with an average offered rate of 6.56%, a cumulative decline of nearly half a percentage point since an early November peak. Home loans with shorter terms are most popular with homeowners looking to refinance, but rates will need to be significantly lower than now to entice many homeowners to change mortgages.
Fixed mortgage rates have retreated meaningfully in recent weeks, lessening the appeal of choosing an ARM as an alternative. Freddie Mac's legacy survey data pegs the interest for a hybrid 5/1 ARM at 6.75%, down seven basis points (0.07%%) from last week.
As they are often kept in a lender's portfolio rather than sold to investors, rates on ARMs vary more widely from lender to lender than do fixed-rate mortgages. In contrast to Freddie's survey data, a different observation of offered rates for 5/1 ARMs -- one from the Mortgage Bankers Association's weekly applications survey -- declined quite bit more, with this observation decreasing by seventeen basis points (0.17%) to 6.59% in the MBA's latest report.
Slower economic growth and a cooler trend for inflation appears to have more investors betting that the Fed will no longer need to raise interest rates. In fact, there are growing bets that rate cuts may be coming as early as March, but that does seem to be a little too aggressive a time line, given that core PCE inflation is still well above the 2% goal for which the Fed is aiming. However, the trend for prices is favorable, and the latest annual core PCE rate is down to 3.5%, the lowest it has been since April 2021.
The next Fed meeting is now just two weeks away; futures markets show about a 96% probability that the Fed will not change monetary policy for a third straight meeting. By March, these same speculators place more than a 43% chance of a quarter-point cut in rates. For our part, we'll wait until the release of the next Summary of Economic Projections (due December 13) to hazard any guess as to when the Fed will likely begin the slow process of trimming policy rates.
But all that is off in the future. In the very near term, there remains at least some downforce on mortgage rates, but probably only a little. We expect to see slightly lower mortgage rates in the market 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.
Current mortgage rates
Week | 30-year-Fixed | 15-year-Fixed |
---|---|---|
11/30 | 7.220% | 6.560% |
11/22 | 7.290% | 6.670% |
11/16 | 7.440% | 6.760% |
11/09 | 7.500% | 6.810% |
11/02 | 7.760% | 7.030% |
10/26 | 7.790% | 7.030% |
10/19 | 7.630% | 6.920% |
10/12 | 7.570% | 6.890% |
10/05 | 7.490% | 6.780% |
09/28 | 7.310% | 6.720% |
09/21 | 7.190% | 6.540% |
09/14 | 7.180% | 6.510% |
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.