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Today, mortgage rates have risen across various terms, according to recent data from Zillow. The 30-year fixed interest rate has climbed by 10 basis points to 6.59%, while the 15-year fixed rate has seen a rise of 15 basis points, bringing it to 5.93%.
Two important inflation reports released this week — the Consumer Price Index (CPI) and the core Producer Price Index (PPI) — indicate that inflation has slowed down in February. However, this reduction is not substantial enough for economists to believe that the Federal Reserve will lower the federal funds rate in the immediate future. Although some had speculated that this might occur at the Fed’s May meeting, expectations have shifted towards a possible rate cut in June. For prospective homebuyers looking to purchase before the summer season, it may be wise to initiate their search sooner rather than waiting for lower mortgage rates that may not materialize quickly.
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The current mortgage rates, based on the latest Zillow statistics, are as follows:
30-year fixed: 6.59%
20-year fixed: 6.45%
15-year fixed: 5.93%
5/1 ARM: 6.85%
7/1 ARM: 7.13%
30-year VA: 6.15%
15-year VA: 5.59%
5/1 VA: 6.15%
These figures represent national averages and are rounded to the nearest hundredth.
Learn more: 5 strategies for getting the lowest mortgage rates
Today’s mortgage refinance rates, as provided by Zillow, are:
30-year fixed: 6.61%
20-year fixed: 6.19%
15-year fixed: 5.90%
5/1 ARM: 7.18%
7/1 ARM: 7.02%
30-year VA: 6.09%
15-year VA: 5.82%
5/1 VA: 6.09%
30-year FHA: 6.00%
15-year FHA: 5.75%
Similar to the previous statistics, these refinance rates are national averages and rounded to the nearest hundredth. Generally, refinance rates can be higher compared to rates for purchasing a new home, but exceptions can occur.
To assess how different interest rates and loan terms will impact your monthly mortgage payments, consider utilizing Yahoo Finance’s free mortgage calculator. This tool also incorporates elements like home price and down payment into its calculations.
When opting for a 30-year fixed mortgage, buyers see benefits such as lower monthly payments and predictable expenses. These fixed-rate mortgages spread repayment over a longer duration compared to shorter terms like 15-year mortgages, which leads to more manageable monthly payments and stability.
However, borrowers should also consider the long-term implications. A 30-year fixed mortgage typically carries a higher interest rate than its 15-year counterpart, resulting in greater total interest payments over the loan’s lifespan.
Conversely, a 15-year fixed mortgage provides advantages including lower interest rates and reduced overall cost due to the shorter timeline for repayment. While monthly payments are higher compared to those of a 30-year term, the potential savings in interest can amount to significant sums, making it an appealing option for many.
Dig deeper: 15-year vs. 30-year mortgages
Adjustable-rate mortgages (ARMs) often feature lower initial rates compared to 30-year fixed loans. For instance, in a 5/1 ARM, the interest rate remains stable for the initial five years before it adjusts annually for the remaining 25 years. While this can result in lower entry costs, there is uncertainty regarding future payments once the introductory phase concludes.
If you plan to relocate before the adjustment period takes effect, an ARM could be advantageous, as it allows you to benefit from lower rates without facing potential increases.
Learn more: Adjustable-rate vs. fixed-rate mortgage
Currently, the market landscape presents a favorable window for homebuyers compared to the previous two years, with home prices stabilizing after the peaks witnessed during the COVID-19 pandemic. Given that mortgage rates are not expected to decline sharply in the near future, the present may represent a strategically sound time to enter the market.
Ultimately, the ideal time to buy a home aligns with personal circumstances rather than market timing, similar to investing in stocks. Seeking the right moment based on one’s life stage and requirements yields the most significant benefits.
Read more: Which is more important, your home price or mortgage rate?
As of now, Zillow notes that the average 30-year mortgage rate stands at 6.59%, acknowledging variability based on local conditions, particularly in high-cost living areas where rates may rise. Overall, while projections for 2025 suggest some moderation in mortgage rates, significant immediate decreases are not anticipated.
It is essential to note that mortgage rates have moved upward for three consecutive days, signaling a trend that potential buyers should monitor.
When refinancing, individuals can enhance their chances of securing favorable rates by improving credit scores and minimizing their debt-to-income ratio (DTI). Choosing a shorter loan term may also lead to lower interest rates, although it comes with the trade-off of higher monthly payments.
Source
finance.yahoo.com