Mortgage Interest Rates Today, September 22, 2024 | Rates Are Slightly Up Following Fed Meeting --[Reported by Umva mag]

The offers and details on this page may have updated or changed since the time of publication. See our article on Business Insider for current information.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.

• Mortgage rates for September 22, 2024, are around 5.70%, according to Zillow data.
• Compared to last month, rates are still low. But they've ticked up slightly in recent days.
• As the Fed lowers its benchmark rate, mortgage rates are expected to ease in 2024 and 2025.

The Federal Reserve cut the federal funds rate by 50 basis points last week, its first rate cut in four years. Mortgage rates dropped substantially ahead of this announcement, but they've actually increased slightly in recent days. Why did this happen?

A lot of people assume that when the Fed cuts rates, mortgage rates will drop, too. But the relationship between Fed moves and mortgages isn't quite that simple. By the time the Fed actually gets around to cutting rates, mortgage rates typically already reflect the impact of that cut. So you'll see mortgage rates move up or down ahead of Fed meetings, but usually not immediately after unless the Fed surprises everyone.

Mortgage rates inched up thanks to recent positive economic data, including the latest jobless claims numbers, which came in below expectations.

The good news is that mortgage rates are still well below where they were a month ago, and they're expected to continue going down this year and in 2025. In August, 30-year rates averaged 6.05%, according to Zillow data. So far in September, they've been around 5.73%.

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 Mortgage Rates

Average 30-year mortgage rates remain around 5.70%, according to Zillow data. Rates have been dropping for several months now, and they averaged around 6.05% in August. 

The 30-year fixed-rate mortgage is the most popular 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, like a 15-year mortgage. 

15-Year Mortgage Rates

Average 15-year mortgage rates have been hovering right around 5%, according to Zillow data. In August, 15-year rates averaged 5.38%, but they've been trending lower so far this month.

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.

ARM Rates

Rates on adjustable-rate mortgages have been slightly higher than fixed rates recently. Last month, the average mortgage rate for a 7/1 ARM was 6.17%, while the average rate for a 5/1 ARM was 6.22%, according to Zillow data. 

When you get an ARM, you'll have a fixed mortgage rate for a certain period of time, after which your rate will adjust periodically. On a 7/1 ARM, for example, your rate will stay fixed for seven years, and then adjust once a year after that until you pay off the loan or refinance.

ARM rates are often (but not always) lower than their fixed-rate counterparts, making an ARM a good deal if you're looking to save on your monthly mortgage payment. But the risk with an ARM is that your monthly payment could increase if rates are up when your rate starts adjusting. 

FHA Interest Rates

FHA interest rates were 5.03% last month, and they've been a bit lower in recent weeks.

FHA loans are insured by the Federal Housing Administration. This federal backing allows lenders to work with borrowers with lower credit scores and less money for a down payment, making these loans a good option for low-income and first-time homebuyers. They also typically have lower rates compared to conventional mortgages.

To get an FHA loan, you'll need a credit score of at least 580 and a down payment of 3.5%. If you can afford to put 10% down on a house, you could qualify for an FHA loan with a score down to 500, though not all lenders offer this option.

VA Mortgage Rates

Current VA mortgage rates are in the low 5% range, according to Zillow data. Last month, VA rates averaged 5.39%.

VA loans are available to veterans and military members who meet minimum service requirements. They're backed by the Department of Veterans Affairs, and require no down payment or mortgage insurance.

Mortgage Refinance Rates

Refinance rates have also been lower in September. Last month, 30-year refinance rates averaged 6.59%, while 15-year refinance rates were around 5.90%. But they're substantially lower than this today.

How Much Do Mortgage Rates Need to Drop to Refinance?

If you're wondering if you should refinance now that mortgage rates have dropped a bit, you'll need to crunch the numbers to see if it makes sense. Some experts advise only refinancing if you can reduce your rate by a percentage point or more, but it really comes down to whether it works for your individual circumstances.

If you can save enough each month by refinancing that you can recoup your costs in a reasonable amount of time, it might be worth it. You can calculate this by dividing your closing costs by the amount you're saving on your monthly mortgage payment. So, if you paid $3,000 to refinance and were able to lower your monthly payment by $200, it would take you 15 months to break even on your refinance.

5-Year Mortgage Rate Trends

Here's how 30-year and 15-year mortgage rates have trended over the last five years, according to Freddie Mac data.

What Factors Influence Mortgage Rates?

Mortgage rates are determined by a variety of different factors, including larger economic trends, Federal Reserve policy, your state's current mortgage rates, the type of loan you're getting, and your personal financial profile.

While many of these factors are out of your control, you can work on improving your credit score, paying off debt, and saving for a larger down payment to ensure you get the best rate possible.

How Does the Fed Affect Mortgage Rates?

The Fed aggressively raised the federal funds rate in 2022 and 2023 to slow economic growth and get inflation under control. As a result, mortgage rates spiked.

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. 

Now that the Fed has started lowering its benchmark rate, mortgage rates are down, and they should continue to ease throughout the rest of this year.

Mortgage Rate Predictions 2025

Mortgage rates have been going down in recent months. But it's unclear how much further they'll drop or where they could ultimately end up. 

In general, mortgage rates are expected to continue trending down in 2025 as the Fed lowers its benchmark rate and inflation cools. But that forecast could change depending on how the economy evolves next year. Right now, the Fed is poised to achieve a so-called "soft landing," where it successfully brings inflation back down to its 2% target without sparking an economic downturn. In this scenario, mortgage rates may only decrease moderately in 2025. 

But if the economy cools too much and a recession looks likely, rates may fall more substantially. Or, if inflation stops decelerating or ticks back up, mortgage rates could rise.

The following news has been carefully analyzed, curated, and compiled by Umva Mag from a diverse range of people, sources, and reputable platforms. Our editorial team strives to ensure the accuracy and reliability of the information we provide. By combining insights from multiple perspectives, we aim to offer a well-rounded and comprehensive understanding of the events and stories that shape our world. Umva Mag values transparency, accountability, and journalistic integrity, ensuring that each piece of content is delivered with the utmost professionalism.