Mortgage rates today, July 1, 2024

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After a period of great uncertainty about when, or even if, mortgage interest rates would fall, it’s starting to look like 2024 is when interest rates will finally start to decline.

In June, 30-year mortgage rates averaged about 6.58%, according to Zillow data. This is a decrease from the previous month, but slightly higher compared to January 2024 rates.

For most of the year, forecasters predicted that interest rates would fall as inflation fell. However, inflation remained relatively stable in the first months of 2024, raising concerns that the Federal Reserve would have to keep the federal funds rate elevated longer than expected. This kept mortgage rates high.

However, more recent data suggests that inflation is falling, but slowly. As inflation slows, Fed rate cuts should remove some of the upward pressure on mortgage rates and allow them to decline.

However, borrowers shouldn’t expect huge drops. Interest rates could fall closer to 6% for the rest of 2024, but we may not see them reach the 5% range until 2025 or even 2026.

Current Mortgage Interest Rates

Current refinancing rates

Mortgage calculator

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

Click “More Details” for tips on how to save money on your mortgage in the long run.

30-Year Fixed Mortgage Rates

The average 30-year fixed mortgage rate was 6.86% last week, down one basis point from the previous week, according to Freddie Mac.

The 30-year fixed-rate mortgage is the most popular type of home loan. With this type of mortgage, you repay the borrowed amount over 30 years, and the interest rate will not change over the life of the loan.

The long 30-year term allows you to spread your payments over a long period, 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

Last week, the average interest rate on a 15-year mortgage was 6.16%, up three basis points from the previous week, according to Freddie Mac data.

If you want the predictability of a fixed rate but want to spend less on interest over the life of the loan, a 15-year fixed-rate mortgage may be right for you. Because these terms are shorter and have lower interest rates than 30-year fixed-rate mortgages, you can potentially save tens of thousands of dollars in interest. However, you will have a higher monthly payment than if you had a longer term.

When will mortgage interest rates fall?

Mortgage rates began to rise from historically low levels in the second half of 2021 and are up more than three percentage points in 2022. Interest rates also rose sharply last year, although they fell again in late 2023.

As inflation falls, mortgage rates will also fall. Most major forecasts predict falling interest rates later in 2024.

For homeowners who want to leverage the value of their home to cover a large purchase — such as a home renovation — a home equity secured line of credit (HELOC) may be a good solution while we wait for mortgage interest rates to lower. Check out some of our top HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that allows you to borrow against the equity in your home. It works similarly to a credit card in that you borrow as much as you need, rather than receiving the entire borrowed amount in one go. It also allows you to use money you have in your home without having to replace your entire mortgage like you would with a cash-out refinance.

Current interest rates on HELOC loans are relatively low compared to other lending options, including credit cards and personal loans.

How do Fed rate hikes affect mortgages?

The Federal Reserve raised the federal funds rate significantly last year in an attempt to slow economic growth and bring inflation under control. Inflation has fallen significantly in response, though it remains slightly above the Fed’s target rate of 2%.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often rise or fall ahead of changes in Fed policy. This happens because mortgage rates fluctuate based on investor demand for mortgage-backed securities, and that demand often depends on how investors expect Fed rate increases will affect the broader economy.

The Fed’s hikes have driven mortgage rates higher over the past two years. However, the Fed has indicated that it has likely raised rates and could begin cutting them in 2024. As the Fed cuts rates, mortgage rates should fall even further.

Molly Grace is a mortgage reporter at Business Insider with over six years of experience writing about mortgages and home ownership. ExperienceIn addition to covering mortgage rates every day, Molly also writes mortgage lender reviews and educational articles on home buying, and analyzes economic data and trends to provide readers with practical, up-to-date real estate information.It also tracks affordable mortgage and down payment assistance programs offered across the country to inform its readers about the homebuyer programs available to them. Before working at Business Insider, Molly was a blogger at Rocket Companies and helped create the Shorty Award-winning podcast Home. Made at Rocket Mortgage.Molly is passionate about discussing personal finance with compassion and her goal is to make the knowledge of home ownership more accessible, especially for groups that may feel that home ownership is out of reach. ExpertiseMolly is an expert in the following topics:

• Mortgages and mortgage lenders
• Real estate equity
• Real estate market
• The Economy and the Forces Affecting Mortgage Rates
• Budgeting and saving
• Loan
• Insurance
• Retirement savings

EducationMolly earned a bachelor’s degree in journalism from Indiana University. He lives in Michigan and has a dog and two cats. “/>

Molly Grace

Mortgage reporter