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According to Zillow data, 30-year mortgage rates have averaged about 6.10 percent so far this month. As a result of weakening economic data, rates have fallen significantly in recent weeks and are likely to fall even further in the coming months.

As mortgage rates fall, more borrowers have the opportunity to buy or refinance a home. If you’re actually considering buying a home soon, now could be a good time to do so.

Interest rates are currently at their lowest levels in over a year. If they continue to fall, demand will likely increase, potentially setting the stage for an extremely competitive home buying season in 2025. This could drive home prices up even faster. Buying now will allow you to take advantage of today’s home prices and potentially have the opportunity to refinance at an even lower mortgage rate later.

Mortgage rates today

Mortgage refinance rates today

Mortgage calculator

Use our free mortgage calculator to see how current mortgage rates will affect your monthly and long-term payments.

By using different terms and interest rates, you can see how your monthly payment might change.

Mortgage interest rates with 30-year fixed term

According to Freddie Mac, the average interest rate on 30-year mortgages was 6.49 percent this week, up two basis points from the week before.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you pay back the money you borrow over 30 years and your interest rate does not change over the life of the loan.

The long 30-year term allows you to spread your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The downside is that you’ll have to pay a higher interest rate than with shorter terms or variable rates.

Mortgage interest rates with 15-year fixed term

According to Freddie Mac data, average 15-year mortgage rates were 5.66 percent this week, up three basis points from the previous week.

If you want the predictability of a fixed rate but want to pay less interest over the life of your loan, a 15-year fixed rate mortgage might be right for you. Because these terms are shorter and have lower interest rates than 30-year fixed rate mortgages, you could potentially save tens of thousands of dollars in interest. However, your monthly payment will be higher than with a longer term.

Are mortgage interest rates falling?

Mortgage rates have risen for most of 2023. However, mortgage rates are expected to fall in the coming months and years.

Over the past 12 months, the consumer price index rose 2.9%. If inflation subsides and the Federal Reserve can cut interest rates, mortgage rates should continue to fall.

For homeowners looking to leverage their home’s value to finance a major purchase — like a renovation — a home equity line of credit (HELOC) can be a great option while we wait for mortgage rates to drop. Check out some of our best HELOC lenders to start looking for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you only borrow what you need rather than getting the entire borrowed amount at once. It also lets you access the money you have in your home without having to replace your entire mortgage, as you would with a cash-out refinance.

Current HELOC interest rates are relatively low compared to other lending options, including credit cards and personal loans.

How do Fed interest rate hikes affect mortgages?

The Fed aggressively raised interest rates in 2022 and 2023 to slow economic growth and bring inflation under control. As a result, mortgage rates skyrocketed.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often trend up or down in advance of Fed actions. This is because mortgage rates change based on investor demand for mortgage-backed securities, and that demand is often influenced by how investors perceive Fed rate hikes to affect the overall economy.

Now that it looks like the Fed will cut rates soon, mortgage rates have fallen. And they could fall even further, depending on how quickly the Fed cuts its benchmark interest rate.