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Average mortgage rates trended lower on all loan terms compared to a week ago, according to data collected by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all dropped.
The multiple rate cut predictions from the start of the year may be no more, as many experts expect rates to stay higher for longer. The movement of fixed mortgage rates parallels the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy, inflation and Federal Reserve decisions. At the close of the latest Fed meeting on May 1, policymakers held firm and opted not to cut rates. The recent April Consumer Price Index (CPI) data shows inflation easing, but still not to the 2 percent rate the Fed wants.
“The market was enamored with a slightly lower CPI. We are in a ‘buy on any positive news no matter how modest’ state,” says Dick Lepre of RealFinity.
Often, the decision to buy a home isn’t based on market shifts. It comes down to what you need. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than waiting for a time when rates and prices are more favorable.
| Loan type | Today's rate | Last week's rate | Change |
|---|---|---|---|
| 30-year fixed | 7.06% | 7.21% | -0.15 |
| 15-year fixed | 6.50% | 6.71% | -0.21 |
| 5/1 ARM | 6.82% | 6.87% | -0.05 |
| 30-year fixed jumbo | 7.27% | 7.35% | -0.08 |
Rates accurate as of May 21, 2024.
These rates are averages based on the assumptions here. Actual rates displayed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, May 21st, 2024 at 7:30 a.m. ET.
30-year mortgage slides, -0.15%
Today's average rate for the benchmark 30-year fixed mortgage is 7.06 percent, a decrease of 15 basis points since the same time last week. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 7.29 percent.
At the current average rate, you'll pay $669.34 per month in principal and interest for every $100,000 you borrow. That represents a decline of $10.13 over what it would have been last week.
15-year fixed mortgage rate eases, -0.21%
The average rate you'll pay for a 15-year fixed mortgage is 6.50 percent, down 21 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $871 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You'll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.
5/1 ARM retreats, -0.05%
The average rate on a 5/1 adjustable rate mortgage is 6.82 percent, falling 5 basis points over the last 7 days.
Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.82 percent would cost about $653 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan's terms.
Current jumbo mortgage rate eases, -0.08%
The current average rate you'll pay for jumbo mortgages is 7.27 percent, a decrease of 8 basis points over the last seven days. Last month on the 21st, the average rate on a jumbo mortgage was greater than 7.27 at 7.35 percent.
At today's average jumbo rate, you'll pay a combined $683.53 per month in principal and interest for every $100,000 you borrow. Compared with last week, that's $5.44 lower.
Mortgage refinance rates
30-year fixed-rate refinance falls, -0.19%
The average 30-year fixed-refinance rate is 7.03 percent, down 19 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was higher at 7.31 percent.
At the current average rate, you'll pay $667.32 per month in principal and interest for every $100,000 you borrow. That's a decline of $12.82 from last week.
Where are mortgage rates going?
The rates on 30-year mortgages mostly align with the 10-year Treasury yield, which changes with the market, while the cost of variable-rate home loans more directly mirrors the Fed’s moves.
If and when the Fed cuts interest rates depends on evolving economic data, such as the inflation rate and the jobs market. April’s CPI data — which measures inflation — showed inflation at 3.4 percent. While it’s come down since its peak in 2022, it’s still above the Fed’s target rate of 2 percent.
“The April CPI report revealed that the rate of inflation has cooled for the first time in 6 months,” says Melissa Cohn of William Raveis Mortgage. “While this one report is not enough evidence of cooling inflation to get the Fed to implement a rate cut, it is the first step.”
Broader economic factors, such as inflation and employment, affect the Fed’s decisions on rate changes, but your rate is also affected by your personal finances. Depending on your credit score, down payment, debts and income, you could be quoted a rate that's higher or lower than the trend.
What current rates mean for you and your mortgage
Mortgage rates change daily, but it appears that, for now, they will remain above the historical lows of recent years. If you’re shopping for a mortgage, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
"All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming," says Mark Hamrick, senior economic analyst for Bankrate. "But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
- Expert poll: Mortgage rate trend predictions for this week
- Latest mortgage news for this week
- Compare current mortgage rates for today
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
