Today's mortgage and refinance rates: November 9, 2022 |  Fixed rates drop slightly

Today’s mortgage and refinance rates: December 3, 2022 | Rates fall below 6% for the first time since September

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Average 30-year fixed mortgage rates fell below 6% for the first time since late September. Just a few weeks ago, rates were above 7%.

As more and more economic data showed inflation starting to ease, mortgage rates pulled back somewhat from their multi-decade highs. But November’s jobs report, which showed the labor market remains strong despite the Federal Reserve’s efforts to slow the economy, could push rates higher.

The Fed has repeatedly said that one of the main indicators it watches to signal that inflation is slowing is the state of the labor market. In a speech he gave this week at the Brookings Institution, Fed Chairman Jerome Powell said the economy had a labor shortage of about 3.5 million workers. With job openings still far outstripping the number of available workers, wages continue to grow at a pace the Fed considers unsustainable.

The current labor shortage is largely due to an unusually high number of retirements. When workers were laid off during the pandemic, many older workers chose to retire rather than try to re-enter the workforce. COVID deaths and a decline in net immigration are also part of the shortfall, the Fed said.

Stronger-than-expected job gains last month mean the job market is still hot. If the Fed decides it needs to act more aggressively to slow economic growth, mortgage rates could rise. But so far, markets are still widely expecting the Fed to start easing its pace of raising the fed funds rate.

The next big data to watch will be the Consumer Price Index report, which is scheduled for release on the first day of the Fed’s December meeting. If the CPI data shows that inflation is not falling as much as expected, the Fed could opt for a bigger hike, which would likely lead to higher mortgage rates.

Mortgage rates today

Type of mortgage Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Mortgage refinance rates today

Type of mortgage Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

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Use our free mortgage calculator to see the impact of today’s mortgage rates on your monthly payments. By plugging in different rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.

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Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

Click “More Details” for tips on how to save money on your long-term mortgage.

30-year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.49%, according to Freddie Mac. This is a drop of almost 10 points compared to the previous week.

The 30-year fixed rate mortgage is the most common type of mortgage. 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 30-year long term allows you to spread your payments out over a long period, which means you can keep your monthly payments lower and more manageable. The tradeoff is that you’ll get a higher rate than with shorter terms or adjustable rates.

15-year fixed mortgage rates

The average 15-year fixed mortgage rate is 5.76%, down from the previous week, according to data from Freddie Mac.

If you’re looking for 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 right for you. Since 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 will have a higher monthly payment than you would with a longer term.

Are mortgage rates increasing?

Mortgage rates started to recover from historic lows in the second half of 2021 and have risen significantly so far in 2022. But mortgage rates have fallen recently and they may not come back up this year.

Over the past 12 months, the consumer price index has increased by 7.7%. The Federal Reserve has been struggling to keep inflation under control and is expected to raise the federal funds rate again this year, following increases at its previous six meetings.

Inflation remains high, but has started to slow, which is a good sign for mortgage rates and the economy in general.

How do Fed rate hikes affect mortgages?

The Fed raised the federal funds rate this year in an attempt to slow economic growth and bring inflation under control.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often tend to rise or fall ahead of Fed policy changes. This is because mortgage rates change based on investor demand for mortgage-backed securities, and that demand is often influenced by how investors expect Fed hikes to affect the economy. in general.

As inflation begins to decline, mortgage rates are also expected to decline. But the Fed has signaled it is watching for continued signs of slowing inflation and won’t stop raising rates anytime soon, though it may start opting for more modest hikes in future meetings. .

Are HELOCs a good idea right now?

Many homeowners have acquired a lot of equity over the past two years as home prices have risen at an unprecedented rate. But since rates are so high today, tapping into that equity can be costly.

For homeowners looking to leverage the value of their home to cover a large purchase, such as a home improvement, a home equity line of credit (HELOC) can still be a good option.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similar to a credit card in that you borrow what you need rather than getting the full amount you borrow in one lump sum.

Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than with a home equity loan or cash refinance. Just keep in mind that HELOC rates are variable, so if rates start to increase further, yours will likely increase as well.

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