Today’s Mortgage Refinance Rates: December 17, 2022

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mortgage rates fell again this week, according to freddy mac. The 30-year average fixed rate mortgage it is now at 6.31%, more than 0.75 percentage points below what it was when rates peaked in November. Average 15-year fixed rates also fell to 5.54%.

Despite the lower rates, many potential homebuyers are still hesitant to enter the market.

“Mortgage rates continued their downward trajectory this week as softer inflation data and a modest change in Federal Reserve monetary policy weighed on the economy,” Sam Khater, chief economist at Freddie Mac, said in a statement. . Press release. “The good news for the housing market is that recent rate declines have led to a stabilization in buying demand. The bad news is that demand remains very weak in the face of affordability hurdles that are still quite tall”.

For those who remain in the market, now is a good time to take advantage of the low demand. Low home buying demand means buyers have more power to deal with sellers, so now is the time to ask for contingencies or negotiate a lower price.

Mortgage Rates Today

Mortgage Refinance Rates Today

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use our free mortgage calculator to see how current interest rates will affect your monthly payments.

By clicking “More Details,” you’ll also see how much you’ll pay over the life of your mortgage, including how much goes toward principal versus interest.

Fixed 30-year mortgage rates

current average 30 year fixed rate mortgage is 6.31%, according to freddy mac. This is a 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 over the life of the loan.

The long term of 30 years allows you to spread your payments over a long period of time, which means you can keep your monthly payments lower and more manageable. The trade off is that you will have a higher rate than you would with shorter terms or adjustable rates.

15-year fixed mortgage rates

Average 15 year fixed rate mortgage is 5.54%, a decrease from the previous week, according to data from Freddie Mac.

If you want the predictability that comes with a fixed rate but want to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good option 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 will have a higher monthly payment than with a longer term.

How do Fed rate hikes affect mortgages?

The Federal Reserve has been increasing the federal funds rate this year to try to curb economic growth and control inflation. So far, inflation has slowed a bit, but it’s still well above the Fed’s 2% target rate.

Mortgage rates are not directly affected by changes in the federal funds rate, but often tend to rise or fall in advance of Federal Reserve policy actions. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often affected by how investors expect Federal Reserve hikes to affect the economy. usually.

As inflation starts to come down, mortgage rates should too. But the Fed has indicated that it is watching for sustained signs of slowing inflation and that it will not stop raising rates any time soon, although it may start targeting smaller increases at its next meetings.

When will mortgage rates go down?

Mortgage rates have risen dramatically so far in 2022, but there are signs they may have finally peaked.

In October, the The Consumer Price Index increased 7.1% year-over-year, a significant slowdown compared to the previous month. This is good news for mortgage borrowers and the economy in general.

As inflation falls, mortgage rates are likely to fall as well. But the Fed is looking for sustained signs of slowing inflation, which means it’s not likely to stop raising rates anytime soon, although officials have said they hope to start slowing the pace of rate hikes. This should help ease the upward pressure on mortgage rates.

Are HELOCs a good idea right now?

Many homeowners made a lot of equity in the last two years as house prices increased at an unprecedented rate. But because rates are so high now, tapping into that capital can be expensive.

For homeowners looking build equity in your home to cover a large purchase, such as a home renovation, a home equity line of credit (HELOC) it can still be a good option.

A HELOC is a line of credit that allows you to borrow against the equity in your home. It works similar to a credit card in that you borrow what you need instead of getting the full amount you’re borrowing 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 a refinancing with cash withdrawal. Just keep in mind that HELOC rates are variable, so if rates start to rise further, chances are yours will, too.