Mortgage Interest Rates Today, July 20, 2024 | Rates Are Trending Down

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Mortgage rates have been trending down this month, and they could fall further throughout the remainder of 2024. This week, 30-year mortgage rates averaged around 6.31%, down 19 basis points from the week before, according to Zillow data. 

Rates have eased in response to data showing that the economy is continuing to cool off after spending the last few years running too hot. The Consumer Price Index, a key measure of inflation, peaked at 9.1% in June 2022; last month, it was down to 3.0%. 

As long as inflation continues to decelerate, mortgage rates should keep trending down. The Federal Reserve is expected to start lowering the federal funds rate at its meeting in September, according to the CME FedWatch Tool. This should remove some of the upward pressure off of mortgage rates and allow them to decrease.

But if progress on inflation stalls, the Fed may decide to wait longer to start cutting rates. This would likely keep mortgage rates from falling further.

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Use our free mortgage calculator to see how today's interest rates will affect your monthly payments.

By clicking on "More details," you'll also see how much you'll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.

30-Year Fixed Mortgage Rates

Last week's average 30-year fixed mortgage rate was 6.77%, according to Freddie Mac. This is a 12-basis-point decrease 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 fell to 6.05% last week, according to Freddie Mac data. This is a 12-basis-point decrease from 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 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 this year. This would 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're expected to go down at some point this year.

In June 2024, the Consumer Price Index rose 3.0% year-over-year. Inflation has slowed significantly since it peaked last year, which means mortgage rates should soon start trending down.

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.