Average 30-year rates end week flat as market awaits key labor data

New data from Freddie Mac shows mortgage rates for popular terms ticking up as of Friday, October 4, 2024, while average 30-year fixed rates reported by lenders are relatively flat to end the week. Lenders are keeping a close eye on new employment data released later today, which — if it misses economic estimates, showing weaker job growth or higher unemployment than expected — could influence the pacing and size of another rate cut when the Federal Reserve meets for its November policy meeting.

The current average rate for a 30-year fixed mortgage is 6.23% for purchase and 6.21% for refinance, up 1 basis point from 6.22% for purchase and 2 basis points from 6.19% for refinance last Friday. Rates on a 15-year mortgage stand at an average 5.48% for purchase and 5.47% for refinance, up 10 basis points from 5.38% for purchase and 8 basis points from 5.39% for refinance over the past week. The average rate on a 30-year fixed jumbo mortgage is 6.41%.

⭐️ Must read: How much does a 1% change in mortgage rates actually matter?

Purchase rates for Friday, October 4, 2024

• 30-year fixed rate — 6.23%

• 20-year fixed rate — 5.98%

• 15-year fixed rate — 5.48%

• 10-year fixed rate — 5.46%

• 5/1 adjustable rate mortgage — 5.89%

• 30-year fixed FHA rate — 5.97%

• 30-year fixed VA rate — 6.16%

• 30-year fixed jumbo rate — 6.41%

Refinance rates for Friday, October 4, 2024

• 30-year fixed rate — 6.21%

• 20-year fixed rate — 5.98%

• 15-year fixed rate — 5.47%

• 10-year fixed rate — 5.48%

• 5/1 adjustable rate mortgage — 5.77%

• 30-year fixed FHA rate — 6.05%

• 30-year fixed VA rate — 6.38%

• 30-year fixed jumbo rate — 6.20%

Source: Bankrate lender survey

Freddie Mac weekly mortgage report: Mortgage rates tick up

Freddie Mac reports an average 6.12% for a 30-year fixed-rate mortgage, up 4 basis points from last week’s average 6.08%, according to its weekly Prime Mortgage Market Survey of nationwide lenders published on October 3, 2024. The fixed rate for a 15-year mortgage is 5.25%, up 9 basis points from last week’s average 5.16%. These figures are lower than a year ago, when rates averaged 7.49% for a 30-year term and 6.78% for a 15-year term.

“The decline in mortgage rates has stalled due to a mix of escalating geopolitical tensions and a rebound in short-term rates that indicate the market’s enthusiasm on rate cuts was premature,” says Sam Khater, Freddie Mac’s chief economist, of the latest data. “Zooming out to the bigger picture, mortgage rates have declined one and a half percentage points over the last 12 months, home price growth is slowing, inventory is increasing, and incomes continue to rise. As a result, the backdrop for homebuyers this fall is improving and should continue through the rest of the year.”

Freddie Mac updates its Prime Mortgage Market Survey data weekly on Thursdays at noon ET.

Mortgage rates for October 4, 2024

Mortgage rates are determined by many factors that include inflation rates, economic conditions, housing market trends and the Federal Reserve’s target interest rate. Lenders also consider your personal credit score, the amount available for your down payment, the property you’re interested in and other terms of the loan you’re requesting, like 30-year or 15-year offers.

Because mortgage rates can fluctuate daily, it’s best to lock in a rate when you’re comfortable with the overall conditions of your mortgage or home loan.

Dig deeper

Mortgage rates in the news

Mortgage lenders keep a close eye on the benchmark federal funds target interest rate set by the Federal Reserve, the U.S.’s central bank. Called the Fed rate, it’s the benchmark that affects rates on deposit accounts, loans and other financial products. Typically, as the fed rate rises, so do APYs on savings products like CDs, high-yield savings accounts, money market accounts and home equity loans. Mortgage rates don’t follow the Fed rate as closely, but they do reflect the same elements the Fed evaluates when making decisions on the benchmark — especially inflation — which means as the Fed rate increases, mortgage rates also tend to rise.

After increasing the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic, the Federal Reserve announced a highly anticipated half-point cut to its federal funds target interest rate after its September 2024 policy meeting.

September 18, 2024: Fed lowers benchmark rate for first time since March 2020

At the conclusion of its sixth rate-setting policy meeting of 2024 on September 18, 2024, the Federal Reserve announced it was lowering the federal funds target interest rate by 50 basis points to a range of 4.75% to 5.00% — the first cut since the Fed began raising rates in March 2022 — from a 23-year high of 5.25% to 5.50%.

A half-point cut isn’t typical of the Fed’s decisions, which historically call for measured quarter-point reductions, but points to an urgency in keeping the economy healthy, easing a slowdown in the labor market and averting a recession.

In its post-meeting statement, the Federal Reserve said it was lowering the target range “in light of the progress on inflation and the balance of risks,” acknowledging it’s “gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”

Economists estimate at least two additional rate cuts this year with an additional four cuts anticipated in 2025.

What to expect at the Fed’s November policy meeting

It’s too early to predict what the Federal Reserve will decide at its next policy meeting on November 6 and November 7, 2024, though many experts expect the Fed will announce additional cuts to the federal funds rate in the year to come.

Economists are keeping a close eye on inflation and labor reports amid speculation as to timing of future cuts to the Fed rate. Signs of cooling inflation paved the way for September’s first rate cut, with economic data indicating a continued decline from a peak of 9.1% in June 2022 to rates that have ranged from 2.5% and 4% since May 2023.

An eagerly awaited jobs report released September 6 showed softer job growth in August but also a rise in hiring, putting the unemployment rate at 4.2%, down from 4.3% in July. An August 21 revision to employment data indicated the labor market may have been cooling before initially thought, with 818,000 fewer jobs created from April 2023 through March 2024, stoking recession fears. Economists are keeping a close eye on new employment data due later today.

Continued good news for the economy came from the one-two punch of twin inflation reports in mid-September. The consumer price index released on September 11 showed consumer prices rose 2.5% year over year in August, down from 2.9% in July — the lowest index reading since March 2021. The producer price index released on September 12 reported a modest 0.2% increase in wholesale prices — or the prices manufacturers pay to producers of goods and services — in August from July, in line with expectations.

At a post-meeting press conference on September 18, Federal Reserve Chair Jerome Powell said, “The U.S. economy is in good shape. It is growing at a solid pace. Inflation is coming down,” but also warned not to take the half-point cut as “the new pace,” adding, “I think we’re going to go carefully meeting by meeting, and make our decisions as we go.”

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Thursday, November 7, 2024, at 2 p.m. ET.

Dig deeper: When’s the next Federal Reserve meeting? What to expect — and how it affects your finances

NAR settlement and realtor commission changes

On April 23, a judge granted preliminary approval to a $418 million antitrust settlement with the National Association of Realtors that ends customary real estate broker commissions of up to 6% of a home’s purchase price. Effective August 17, real estate agents are required to provide interested buyers with a representation agreement before touring a home. This agreement is a new step designed to introduce transparency into the buyer’s relationship with the agent, the agent’s fees and how those fees are paid. The settlement isn’t expected to affect mortgage rates, yet it paves the way for consumers to negotiate what they pay for an agent’s services, saving them money in the long run.

4 top factors that affect your mortgage rate

The difference of even half a percentage point on your interest rate can save you hundreds of dollars a month and thousands of dollars over the life of your mortgage, but the mortgage rate you’re ultimately offered depends on the mortgage you’re interested in, payments you’re willing to pay up front and your overall financial health.

• Your credit score. Knowing your credit score can help you shop around for lenders you’re likely to get approval through, as well as understand the type of mortgage for your lifestyle and income. The best mortgage rates go to borrowers with good to excellent credit — typically a FICO credit score of at least 670 — though even with fair credit, you may be able to find a mortgage offering decent rates.

• Your down payment. The more money you can put down toward your home, the better it benefits your interest rate. Paying at least 20% of your home’s purchase price up front generally results in a lower interest rate — and you can avoid mortgage insurance, which increases your total cost.

• Your loan term. While the 30-year mortgage remains a popular way for Americans to purchase homes, you can find terms of 20 years, 15 years and 10 years. Shorter loan terms usually come with lower interest rates, though with higher monthly payments. Longer mortgage terms can result in smaller monthly payments, though you’ll pay higher total interest over the life of your loan.

• Interest rate type. Mortgage rates come with two basic types of rates — fixed and variable. Fixed-rate mortgages offer a consistent interest rate over the life of your loan, whereas adjustable-rate mortgages (ARMs) often start with a lower fixed rate for an agreed-on time and then adjust to a variable rate based on market conditions for the remainder of your term. Choosing between these two rates depends on your financial goals and tolerance for risk.

Dig deeper: 6 ways to get the lowest rate on your next mortgage

Frequently asked questions about mortgage rates

What are mortgage lenders?

Lenders are financial institutions that loan money to homebuyers. A lender is different from a loan servicer, which typically handles the operational tasks of your loan, like processing payments, talking directly with borrowers and sending monthly statements.

What does it mean to refinance a mortgage?

Refinancing is a process of trading in your current mortgage to another lender for lower rates and better terms than your current loan. With a refinance, the new lender pays off your old mortgage and you then pay your monthly statements from the new lender.

What is an adjustable-rate mortgage?

An adjustable-rate mortgage — commonly called an ARM — is a type of home loan with a variable rate. Unlike a fixed-rate mortgage, which locks in an interest rate and predictable payments that apply over the full loan term, an ARM starts at an initial fixed rate for a period of three years or longer, after which it adjusts to a higher rate and then further adjusts periodically over the remaining life of the loan.

For a 5/1 adjustable-rate mortgage, the first number indicates the number of years at the fixed rate — or five years — and the second number indicates the rate at which the mortgage rate readjusts after — in this case, each year or annually.

Why are mortgage rates so high?

Mortgage rates are influenced by complicated factors like inflation, employment rates, the bond market and the overall economy. While the Federal Reserve doesn’t set mortgage rates, this central bank of the U.S. sets benchmark rates that indirectly affect rates on financial products like mortgages, personal loans and deposit accounts.

Can I negotiate my mortgage rate?

It’s not likely — lenders consider the market conditions and other financial factors when determining rates. You can, however, ask about how you can reduce costs in other ways when comparing mortgage lenders. For instance, many lenders offer lower rates in exchange for “mortgage points” — upfront fees you pay to your lender. A mortgage point could cost 1% of your mortgage amount, which means about $5,000 on a $500,000 home loan, with each point lowering your interest rate by about 0.25%, depending on your lender and loan. Learn more in our guide to getting the lowest rate on your next mortgage.

What happens to my mortgage after I die?

Your home’s mortgage is treated a little differently from your other debt, which is typically settled through your estate before any assets are passed along to your heirs. Most mortgages aren’t transferable, which means the home must be paid off in full to transfer the property title.

But that also means only those who signed on to the loan can be held liable for a mortgage. Learn more about what happens to your mortgage after death.

I already own a home. Can I borrow against my home’s equity to cover a high-dollar or unexpected cost?

Yes. If it’s cash you’re after to pay for home renovations, pay off high-interest credit card debt or cover an emergency, tapping into your home’s value is a way to unlock lower rates without refinancing — and without losing your low-rate mortgage. You typically need good to excellent credit and to have built enough equity in your home. Learn how to get equity out of your home as rates come down.

Editor’s note: Rates shown are as of Friday, October 4, 2024, at 6:20 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.

Sources

• Mortgage Industry Insights, Bankrate. Accessed October 4, 2024.

• U.S. Economic, Housing and Mortgage Market Outlook – September 2024, Freddie Mac. Accessed September 25, 2024.

• Primary Mortgage Market Survey, Freddie Mac. Accessed September 27, 2024.

• Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed September 9, 2024.

• 2024 Preliminary Benchmark Revision, U.S. Bureau of Labor and Statistics. Accessed August 5, 2024.

• Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed September 12, 2024.

• Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed September 13, 2024.