Mortgage Rates on the Rise, But Relief May Be on the Horizon

Mortgage Rates on the Rise, But Relief May Be on the Horizon

For potential homebuyers, securing a mortgage has become a more expensive endeavor in 2024. As of May 7th, the average interest rate for a 30-year fixed mortgage sits at 7.34%, a significant increase compared to the rates prevailing in early 2022. This rise in rates corresponds with the Federal Reserve’s efforts to combat inflation by raising interest rates

Despite the current bump, there is a glimmer of hope for those looking to buy a home. Experts predict that mortgage rates will eventually start to decline in 2024, as the Federal Reserve has indicated it will begin cutting rates later this year. This is in response to an expected cooling of the economy and a decrease in inflation.

Here’s a quick breakdown of the current mortgage rate landscape:

  • 30-year fixed: 7.34% (up from 7.12% in early May)
  • 15-year fixed: 6.55% (up from 6.43% in early May)
  • Adjustable-rate mortgage (ARM): Rates for ARMs may be more attractive than fixed rates in the current climate. The average for a 5/1 ARM is currently around 6.04%.

If you’re considering refinancing your existing mortgage, you’ll also find rates to be higher than in previous years. The current average interest rate for a 30-year fixed refinance is 7.34%.

The decision of whether to buy a home now or wait for rates to fall depends on your individual circumstances. If you find a house you love and can afford the monthly payments, there’s no reason to wait. However, if you’re flexible on timing and are rate-sensitive, waiting for a better rate could save you money in the long run.

Here are some resources to help you stay informed about mortgage rates:

  • Bankrate: [mortgage rates ON Bankrate]
  • Forbes: [mortgage rates forbes ON]

Author: SARA