Mortgage Interest Rates Today, March 28, 2024 | Rates Are Down This Week. Will They Stay That Way?
These are today's mortgage and refinance rates. Mortgage rates have dropped, but we could still experience some volatility depending on how inflation trends.
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Mortgage rates have been inching down this week, and they're expected to fall further later this year. But we could still see some volatility in the coming months depending on how the latest economic data shakes out.
Average 30-year mortgage rates have remained below 6.5% for several days now after spiking up near 6.7% last week, according to Zillow data.
When rates might fall further depends on the economy. As inflation slows and the labor market comes into better balance, mortgage rates are expected to trend down. But the path to lower rates may be a bumpy one. Inflation has been somewhat sticky in recent months, and it ticked up unexpectedly in the latest Consumer Price Index report.
But Federal Reserve officials still expect inflation to continue slowing, which should enable them to start lowering the federal funds rate at some point this year. Once the Fed begins cutting rates, mortgage rates should trend down more permanently.
Investors are currently pricing in a potential cut at the Fed's June meeting, according to the CME FedWatch Tool. But until we get more data showing that price growth is moderating, mortgage rates may be somewhat unpredictable.
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30-Year Fixed Mortgage Rates
Last week's average 30-year fixed mortgage rate is 6.87%, according to Freddie Mac. This is a 13-basis-point increase from the previous week.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms or adjustable rates.
15-Year Fixed Mortgage Rates
Average 15-year mortgage rates inched up to 6.21% last week, according to Freddie Mac data. This is a five-point increase since the week before.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.
How Do Fed Rate Hikes Affect Mortgages?
The Federal Reserve has increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has slowed significantly, but it's still a bit above the Fed's 2% target rate.
Mortgage rates aren't directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.
The Fed has indicated that it's likely done hiking rates and that it could start cutting soon. This will likely allow mortgage rates to trend down later this year.
When Will Mortgage Rates Go Down?
Mortgage rates increased dramatically over the last two years, but they've moderated somewhat in recent months, and are expected to drop further this year.
In February 2024, the Consumer Price Index rose 3.2% year-over-year. Inflation has slowed significantly since it peaked last year, which is good news for mortgage rates. But it has to slow further before rates will begin to fall.
For homeowners looking to leverage their home's value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you'd do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.