Today's Mortgage Rates - 11/21/2024

Rates Drift Higher Again

Mortgage rates resumed their upward push this week.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) increased by six basis points (0.06%) to 6.84%, remaining near mid-July levels.

Average offered rates for 15-year fixed-rate mortgages rose by half as much as their longer-term counterpart, posting a three basis point (0.03%) increase to 6.02%, little changed for a fourth consecutive week.

A 5/1 ARM might offer a homebuyer slightly lower-cost alternative to a long-term fixed-rate mortgage, but the difference in rate between 30-year FRMs and 5/1 ARMs is fairly narrow. The Mortgage Bankers Association reported that the initial fixed interest rate on a hybrid 5/1 ARM rose sharply this week, increasing by a twenty-eight basis points to 6.34% The current 50 basis point gap renders the choice of this ARM rather less compelling for homebuyers seeking a break on monthly payments compared to a long-term fixed-rate mortgage.

Little of the inflation or economic data out in recent days suggest that a decline in rates is forming. Inflation continues to chug along at a level that is still above the Fed's target, and there has been little progress to be seen in getting it closer to target in recent months. At the same time, the overall economy continues to show fair strength, with consumer spending firming up in October. Growth in the fourth quarter is presently reckoned at a 2.6% pace, per the Federal Reserve Bank of Atlanta's GDPNow model.

In a prepared speech and in subsequent comments last week, Fed Chair Powell noted that "The economy is not sending any signals that we need to be in a hurry to lower rates," and that "Going slower, if the data tell us to go a little slower, seems like the smart thing to do," This lends some doubt that a December cut in rates is actually "in play", or perhaps infers that policy next near may be adjusted downward at a slower pace. Once as high as nearly 80%, futures traders now put the odds of a cut at the next Fed meeting at just 55%.

We'll learn more about any changes in Fed members' thinking about the prospects for a December cut when the minutes from the November 6-7 meeting are released in the coming days.

Compared to last week, the yields which most influence mortgage rates are slightly lower. That suggests that mortgage rates are pretty stable at the moment, and that there is a chance they too may be slightly lower over the next few days.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.