Mortgage Interest Rates Today, October 17, 2023 | Rates Likely to Remain Above 7% for the Rest of 2023 – DIGIWIZ CENTRAL

Mortgage Interest Rates Today, October 17, 2023 | Rates Likely to Remain Above 7% for the Rest of 2023

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Mortgage rates are likely to stay at frightening levels even after the Halloween season is over. But we may finally see 30-year mortgage rates dip back below 7% next year, Fannie Mae says.

Rates eased somewhat late last week after spiking above 7.5%, and they’ve been relatively calm so far this week.

In Fannie Mae’s October housing forecast, researchers predicted that mortgage rates will end 2023 around 7.3%, and that they won’t drop below 7% until the second half of 2024. This means that mortgage affordability will likely continue to be a problem for hopeful homebuyers for the foreseeable future.

“In many ways, the housing market experienced four years of business in a two-year period between mid-2020 and mid-2022,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said in a press release. “With ongoing affordability constraints and rising mortgage rates, much of that activity has essentially been given back. We expect the higher mortgage rate environment to continue to dampen housing activity and further complicate housing affordability into 2024.”

Buyers may have more luck closer to the end of 2024, when Fannie Mae researchers believe rates could drop to 6.7%, nearly a full percentage point lower than the 2023 highs.

Mortgage Rates Today

Mortgage Refinance Rates Today

Mortgage Calculator

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

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

30-Year Fixed Mortgage Rates

Last week, the average 30-year fixed mortgage rate was 7.57%, according to Freddie Mac. This is an eight-basis-point increase from the week before.

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 for the life of the loan.

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

Average 15-year mortgage rates were 6.89% last week, according to Freddie Mac data. This is a 11-basis-point increase from the previous week.

If you want 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 a good fit 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’ll have a higher monthly payment than you would with a longer term.

Are Mortgage Rates Going Up?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased significantly in 2022. But mortgage rates are expected to trend down this year.

In the last 12 months, the Consumer Price Index rose by 3.7%. As inflation comes down, mortgage rates should, too. But we’ll likely need to see price growth slow further before we see substantial drops in rates.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

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

How Do Fed Rate Hikes Affect Mortgages?

The Fed has been increasing the federal funds rate to try to slow economic growth and get inflation under control.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

As inflation comes down, mortgage rates should, too. But the Fed has indicated that it’s watching for sustained signs of slowing inflation, and it’s not going to lower rates again any time soon.

Read the original article on Business Insider
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