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Current Trends in Mortgage Rates

Recent data indicates that mortgage interest rates have reached their year’s lowest levels. As reported by Freddie Mac, the average rate for a 30-year fixed mortgage has seen a reduction of 13 basis points, settling at 6.63%. Similarly, the 15-year fixed mortgage rate has dropped by 15 basis points, now at 5.79%.

This decline in rates appears to be influenced by ongoing economic uncertainties, including recent tariffs enacted during the Trump administration. Important economic indicators will be released in the coming weeks, which are likely to affect mortgage rates. This includes today’s jobs report, upcoming inflation statistics, and insights from the Federal Reserve following its meeting on March 19. Each of these elements has the potential to shift interest rates in either direction.

Dig deeper: How does inflation impact mortgage rates?

If you have inquiries regarding the process of buying, owning, or selling a property, you can pose your questions to a select panel of real estate professionals through this Google form.

Here’s a look at the latest mortgage rates as compiled from Zillow data:

30-year fixed: 6.35%

20-year fixed: 6.10%

15-year fixed: 5.66%

5/1 ARM: 6.11%

7/1 ARM: 6.32%

30-year VA: 5.85%

15-year VA: 5.28%

5/1 VA: 5.84%

It is important to note that these figures represent national averages and are rounded to the nearest hundredth.

Learn more: Should you lock in a mortgage rate?

Additionally, current rates for mortgage refinancing, as per Zillow, are as follows:

30-year fixed: 6.38%

20-year fixed: 6.11%

15-year fixed: 5.66%

5/1 ARM: 6.30%

7/1 ARM: 6.47%

30-year VA: 5.87%

15-year VA: 5.56%

5/1 VA: 5.98%

30-year FHA: 6.04%

15-year FHA: 5.33%

As with purchase rates, these refinancing figures are also national averages and rounded accordingly. Notably, mortgage refinance rates can often exceed those associated with home purchases, although this isn’t universally true.

Learn more: Want to refinance your mortgage? Here are 7 home refinance options.

The interest rate for your mortgage significantly influences your monthly payment. Other contributing factors include the size of your down payment, the specific type of loan you pursue, and any required mortgage insurance.

To assess how much home you can realistically afford, consider using a home affordability calculator available for free online.

A mortgage interest rate reflects the fee for borrowing funds from a lender, and is generally presented as a percentage. Borrowers can choose between fixed and adjustable rates.

A fixed-rate mortgage maintains the same interest rate for the life of the loan. For instance, if you secure a 30-year mortgage at 6%, that rate remains unchanged for 30 years, unless you opt to refinance or sell your property.

On the other hand, an adjustable-rate mortgage (ARM) features a fixed rate for an initial period, followed by adjustments on a periodic basis. For example, with a 7/1 ARM, the rate is fixed for the first seven years and will then adjust annually depending on market conditions for the subsequent 23 years.

In the early years of a mortgage, a larger portion of monthly payments goes toward interest rather than the loan principal. However, as time goes on, the trend reverses, with more of each payment contributing to the principal balance.

Learn more: Adjustable-rate vs. fixed-rate mortgages

A 30-year fixed-rate mortgage can be advantageous for those desiring lower monthly payments and the stability of a constant rate. However, borrowers should be mindful that choosing a longer loan term typically results in higher interest costs over time.

If quick repayment and the potential for interest savings are priorities, a 15-year fixed-rate mortgage may be the better option, albeit accompanied by higher monthly payments. Being able to manage these payments is crucial for borrowers.

Read more: How to decide between a 15-year and 30-year fixed-rate mortgage

Adjustable-rate mortgages may be attractive for those planning to sell before the fixed-rate period ends. While these rates often start lower than fixed rates, prospective borrowers should conduct a thorough comparison of rates across different lenders and terms before deciding on an ARM.

Freddie Mac’s data illustrates a continued downward trend in the 30-year fixed mortgage rate over the past seven weeks, and a three-week decline for the 15-year rate. Though these declines have been slight overall, they have become more pronounced recently.

The future trajectory of mortgage rates remains uncertain amidst ongoing economic volatility. A variety of elements, including political developments, inflation trends, and changes to the federal funds rate may influence where rates head next.

Read more: When will the housing market crash again?

Freddie Mac has reported that the national average for the 30-year mortgage rate dropped by 13 basis points from the previous week to 6.63%, while the average for the 15-year mortgage decreased by 15 basis points to 5.79%.

According to forecasts released by the Mortgage Bankers Association (MBA) for February, it is anticipated that the 30-year mortgage rate will stabilize at around 6.50% by the end of 2025, with predictions from Fannie Mae suggesting a rate of 6.60% during the same timeframe.

While some fluctuations in mortgage rates may occur throughout 2025, a probable trend suggests they may taper down towards the end of the year.

Source
finance.yahoo.com