Image credit: PM Images/Getty Images; Illustration by Hunter Newton/Bankrate
Mortgage rates remained steady at 6.59% this week, consistent with last week and the lowest since May 2023, according to Bankrate’s latest survey of lenders. Rates are holding steady at this level as new CPI data shows inflation has fallen below 3% for the first time since 2021.
If you took out a mortgage with an interest rate above 7%, the door is open for you to refinance. If you have an adjustable-rate mortgage and are looking to get out of it, now is your chance. Mortgage rates may fall further in the coming months, but there are no guarantees, and current rates are within reach for prospective borrowers.
— Greg McBride, CFA, Chief Financial Analyst, Bankrate
Current mortgage interest rates
| Types of Loans | the current | 4 weeks ago | 1 year ago | 52-week average | 52-week low |
|---|---|---|---|---|---|
| 30 years | 6.59% | 7.04% | 7.12% | 7.22% | 6.59% |
| 15 years | 5.89% | 6.38% | 6.54% | 6.55% | 5.89% |
| 30 years Jumbo | 6.80% | 7.06% | 6.95% | 7.18% | 6.80% |
In this week’s survey, discount points and origination points for a 30-year fixed mortgage averaged 0.29 combined. Discount points are a way to lower your mortgage interest rate, while origination points are a fee charged by lenders for originating, underwriting and processing the loan.
Monthly mortgage payment at current interest rate
According to the U.S. Department of Housing and Urban Development, the national median household income in 2024 will be $97,800, and the median price of an existing home sold in June 2024 was $426,900, the highest on record, according to the National Association of Realtors. Assuming a 20% down payment and a mortgage interest rate of 6.59%, a monthly payment of $2,179 represents 27% of a typical household’s monthly income.
Will mortgage rates fall?
In the simplest sense, the economy determines whether mortgage rates go up or down. As the recent stock market crash shows, 30-year mortgage rates tend to fall during recessions and economic downturns. The Federal Reserve has a dual mission of keeping inflation and unemployment low. When inflation is high, the Fed will raise the funds rate, but if interest rates are kept too high for too long, it can slow the economy and lead to unemployment. Keeping an eye on recent economic data, many forecasters expect the Fed to start cutting interest rates in September.
“We expect mortgage rates to continue to fall through the rest of the year, especially if the Fed enacts a round of rate cuts in September,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.
“We’re getting closer to the Fed’s 2% inflation target,” said Michael Becker, sales director at Sierra Pacific Mortgage. “This could lead the Fed to start cutting rates in September, with further cuts possible in November and December.”
To be clear, mortgage rates are not set directly by the Fed, but by investor demand, especially for the 10-year Treasury. A 30-year fixed rate mortgage rate is directly tied to the yield on the 10-year Treasury. When there is uncertainty in the market, investors buy Treasury bonds, which in turn drives down yields (and mortgage rates). This can cause mortgage rates to fluctuate from day to day as news comes in.
