Today's Mortgage Rates - 12/03/2024

Mortgage Rates Mixed

It was lower, higher and the same for mortgage rates this week.

As reported by Freddie Mac, the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) decreased by three basis points (0.03%) to 6.81%. Long-term mortgage rates have barely moved in the last four weeks.

Average offered rates for 15-year fixed-rate mortgages moved in the other direction, rising by eight basis points (0.08%), landing at 6.10% to close November. The increase puts them near mid-July levels.

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 failed to move at all this week, holding at 6.34% The current 47 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.

It's a holiday-shortened week but one packed with fresh data, and some of it with direct implications for mortgage and other interest rates. The minutes from the early November Fed meeting revealed that participants expressed a bit of caution in their outlooks, noting that "if the data came in about as expected, with inflation continuing to move down sustainably to 2 percent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time" and that since it's not exactly clear where "neutral" lies, that it would be more "appropriate to reduce policy restraint gradually."

Since the last meeting, it does appear that inflation pressures have continued toward the Fed's 2% core PCE goal. After easing to a 2.7% annual rate back in May, core PCE was essentially level through September, but has now ticked up a little more again in October, posting a 0.3% monthly increase and a 2.8% annualized rate. If progress isn't being made toward the inflation goal, it calls into question whether or not the Fed will make a move at its upcoming meeting. It may be that the October JOLTS and November employment situation reports are the deciding factor. We'll know more soon enough.

Markets can be a bit volatile around holidays, adding more noise that usual to the signals. That said, the yields which most influence mortgage rates are lower this week compared to last, suggesting that mortgage rates have a chance to follow up this week's mixed move with more of an outright modest decline in the coming few days, at least for the 30-year fixed-rate mortgage.

HSH wishes you and yours a very Happy Thanksgiving.

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.