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Thanks to our veterans, and those serve today. If you're thinking about refinancing your VA loan, read How to refinance a VA mortgage loan.

Thanks to our veterans, and those serve today. If you're thinking about refinancing your VA loan, read How to refinance a VA mortgage loan.

Today's Mortgage Rates - 11/11/2024

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Mortgage Rates Rise, Fed Ponders

Mortgage rates firmed up again as the Fed looks to conclude a policy-setting meeting.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) increased by seven more basis points (0.07%) to 6.79%, the highest it has been since mid-July. While the increase this week was small, a post-election bond market rout will need to reverse in coming days to keep rates from rising more sharply again.

The average offered rate for a 15-year fixed-rate mortgage just barely edged higher, sporting just a one basis point (0.01%) increase to a flat 6%, holding at about early August levels for the moment.

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 continues to be narrow. The Mortgage Bankers Association reported that the initial fixed interest rate on a hybrid 5/1 ARM posted a meaningful decline this week, falling by fifteen basis points (0.15%) to land at 6.05%. The current 74 basis point gap makes the choice of this ARM rather more compelling for homebuyers seeking a break on monthly payments compared to its fixed-rate counterpart, at least for the next five years.

As we write this, the Federal Reserve is wrapping up its November meeting, and a quarter-point cut in the federal funds rate is expected. That said, we have written in recent MarketTrends commentary that there is also an argument to be make for keeping policy steady at this meeting, given solid growth, firm labor market conditions and core PCE inflation that has leveled off at about 2.7% over the last five months. Still, the financial markets expect and are positioned for a cut, and the Fed not making a change risks unwanted disruption.

In recent weeks and most especially in the aftermath of Tuesday's election, the longer-term bond yields that most strongly influence mortgage rates have moved appreciably higher. If the recent selloff fails to reverse, long-term fixed mortgage rates will continue higher. Election results are still being tallied; once the dust settles, a clearer sense of the direction of mortgage rates will emerge.

At present, yields and mortgage rates appear to have stabilized and perhaps even declined a little bit. It's too soon to know if this will last. Yields may have retreated somewhat, but remain above where they were last week. At best, mortgage rates may hold steady with a slight downward bias over the next couple of 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
11/07 6.790% 6.000%
10/31 6.720% 5.990%
10/24 6.540% 5.710%
10/17 6.440% 5.630%
10/10 6.320% 5.410%
10/03 6.120% 5.250%
09/26 6.080% 5.160%
09/19 6.090% 5.150%
09/12 6.200% 5.270%
09/05 6.350% 5.470%
08/29 6.350% 5.510%
08/22 6.460% 5.620%

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

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