Today's Mortgage Rates - 07/27/2024

Rate Decline Flattens, As Expected

With a Fed meeting coming up shortly, mortgage rates moved very little this week.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) increased by a single basis point (0.01%) to 6.78%, edging higher after a couple of weeks of declines.

Average offered rates for 15-year fixed-rate mortgages also ticked slightly higher, rising by two basis points (0.02%) to 6.07% this week. Most commonly used by homeowners who are refinancing existing loans, the average rate for the most prevalent shorter-term mortgage now stands just a little above 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 expansive of late. The Mortgage Bankers Association reported that the initial fixed interest rate on a hybrid 5/1 ARM dropped back down to 6.19%, a fourteen basis point (0.14%) fall from the prior week's average rate. At 59 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.

Mortgage rates have eased a bit from this year's peak levels but aren't low enough to help the housing market very much. This week, the National Association of Realtors noted that existing home sales in June declined 5.4% from May to a 3.89 million annual rate of sale. This is a sales pace more akin to the depths of winter rather than then end of the spring homebuying season. As we expected, median existing home prices also hit a new record... again.

Shortly after that the Census Bureau reported that sales of newly-constructed homes came in at a muted pace of 617,000 annualized, a seven-month low. Median sales prices for new homes are actually just about the same as they were a year ago, and well off their top levels from October 2022, but the current $417,300 is a price level that is just as expensive as the existing home market. As such, there's no home affordability relief to be found anywhere.

The influential yields that underlie mortgage rates have been mostly drifting sideways this week, and with a Fed meeting on tap next week probably aren't poised to move very much in 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.