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Mortgage rates experienced some volatility last week, dropping briefly mid-week. But they’ve since trended back up.

Rates are likely to remain elevated throughout the rest of 2022, but they could start to fall in 2023. In its most recent forecast, the Mortgage Bankers Association predicted that 30-year fixed rates will reach 5% by the end of 2023 and 4.4% by the end of 2024.

For buyers who aren’t able to wait for rates to fall, an adjustable-rate mortgage (ARM) could help keep your costs down until fixed rates start to cool. ARMs typically have lower rates than 30-year fixed rates, making them more affordable up front.

However, you run the risk of having a higher monthly payment when your rate starts adjusting, usually between five to 10 years after you close on the loan, depending on the type of ARM you get. You may be able to refinance into a fixed-rate mortgage before your rate resets, but if you can’t, you’ll be stuck with the adjustable rate. Be sure to understand how much your rate could go up each time it adjusts, and the maximum amount it could increase over the life of the loan.

Mortgage rates today

Mortgage type Average rate today

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Mortgage refinance rates today

Mortgage type Average rate today

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This information has been provided by
Zillow. See more
mortgage rates on Zillow

Mortgage calculator

Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.

Mortgage Calculator

$1,161
Your estimated monthly payment

  • Paying a 25% higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Paying an additional $500 each month would reduce the loan length by 146 months

By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.

Are mortgage rates going up?

Mortgage rates started ticking up from historic lows in the second half of 2021 and have increased significantly so far in 2022.

In the last 12 months, the Consumer Price Index rose by 8.3%. The Federal Reserve has been working to get inflation under control, and plans to increase the federal funds target rate two more times this year, following increases at its last five meetings.

Though not directly tied to the federal funds rate, mortgage rates are sometimes pushed up as a result of Fed rate hikes and investor expectations of how those hikes will impact the economy.

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

What do high rates mean for the housing market?

When mortgage rates go up, home shoppers’ buying power decreases, as more of their anticipated housing budget has to go toward paying interest. If rates get high enough, buyers can get priced out of the market completely, which cools demand and puts downward pressure on home price growth.

However, that doesn’t mean home prices will fall — in fact, they’re expected to rise even more this year, just at a slower pace than what we’ve seen in the past couple of years.

Even with fewer buyers in the market, those who can afford to buy will still be competing over historically low inventory. When there are more buyers than there are houses available, home prices go up. So while conditions may loosen up a bit due to high rates, we aren’t likely to see a significant drop in prices.

What is a good mortgage rate?

It can be hard to know if a lender is offering you a good rate, which is why it’s so important to get preapproved with multiple mortgage lenders and compare each offer. Apply for preapproval with at least two or three lenders.

Your rate isn’t the only thing that matters. Be sure to compare both what your monthly costs would be as well as your upfront costs, including any lender fees.

Even though mortgage rates are heavily influenced by economic factors that are out of your control, there are some things you can do to help ensure you get a good rate:

  • Consider fixed vs. adjustable rates. You may be able to get a lower introductory rate with an adjustable-rate mortgage, which can be good if you plan to move before the intro period ends. But a fixed rate could be better if you’re buying a forever home because you won’t risk your rate going up later. Look at the rates your lender offers and weigh your options.
  • Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to boost your credit score or lower your debt-to-income ratio, if necessary. Saving for a higher down payment also helps.
  • Choose the right lender. Each lender charges different mortgage rates. Picking the right one for your financial situation will help you land a good rate.



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