Today’s Mortgage, Refinance Rates: Nov. 22, 2022

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Mortgage rates remained relatively flat after falling more than a week ago. Prices may remain near their current levels for the rest of 2022 before starting to fall in the new year.

Fannie Mae’s Economic and Strategic Research Group predicts that 30-year fixed rates will average 6.8% in 2023 and 6.1% in 2024, according to its latest monthly forecast. The group also expects the economy to experience a “moderate” recession in the first quarter of next year. This will help reduce the pressure on mortgage payments.

“Higher interest rates stimulate a general decline in residential fixed investment, which historically leads to an economic slowdown or recession,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said. in a press release. “From our perspective, the good news is that the demographics remain favorable for housing, so the sector appears well-positioned to help guide the economy out of what we expect to be a short-term recession. .”

Current mortgage rates

Type of mortgage Average rate today
This information is provided by Zillow. See more mortgage rates on Zillow

Current refinancing rates

Mortgage calculator

Use our free mortgage calculator to see how current mortgage rates affect your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the life of your loan.

Mortgage Calculator

$1,161
Your estimated monthly payment

  • Payment a 25% a higher down payment can save you $8,916.08 of interest charges
  • Lowering the interest rate by 1% could have saved you $51,562.03
  • Pay more $500 each month can reduce the length of the loan by 146 months

Click “More details” for tips on how to save money on your mortgage in the long run.

30 year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.61%, according to Freddie Mac. This is a 47-basis-point decrease from the previous week.

A 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you pay back what you borrow over 30 years, and your interest rate doesn’t change for 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 trade-off is that you have a higher rate than you would with shorter terms or adjustable rates.

15 year fixed mortgage rates

The average 15-year fixed mortgage rate was 5.98%, a 40-basis-point drop from last week, according to Freddie Mac data.

Also Read :  Personal loan interest rates plummet for 3- and 5-year fixed-rate loans

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

Should I get a HELOC? Advantages and disadvantages

If you’re looking to tap into your home equity, a HELOC may be the best way to do it right now — especially considering how much home prices have risen over the past two years. Unlike a cash-out refinance, you don’t have to get a whole new mortgage with a new interest rate, and you’ll likely get a better rate than you would on a home. equity loan.

But HELOCs don’t always make sense. It is important to consider the pros and cons.

HELOC pro

  • You only pay interest on what you borrow
  • Often have lower rates than alternatives, including home equity loans, personal loans, and credit cards
  • If you have a lot of equity, you can borrow more than you can with a personal loan

Cons of HELOCs

  • Rates vary, meaning your monthly payment may increase
  • Taking equity out of your home can be dangerous if property values ​​decline or you default on the loan
  • The minimum withdrawal amount may be more than you want to borrow
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When will mortgage rates go down?

Mortgage rates began to rise from historic lows in the second half of 2021 and have risen by three percentage points since January 2022. But rates have recently fallen, and are likely to fall further. in 2023 and 2024.

However, prices are unlikely to drop anytime soon. As inflation begins to decline, mortgage rates will also decrease. If we experience a recession, rates may fall even faster. But average 30-year fixed rates are likely to remain somewhere in the 5% to 6% range through 2023.

How will Fed rate hikes affect mortgages?

The Federal Reserve raised the federal funds rate this year to try to slow economic growth and control inflation. So far, inflation has moderated somewhat, but it is still above the Fed’s 2% target rate.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often move up or down ahead of the Fed’s policy measures. This is because mortgage rates fluctuate based on investor demand for mortgage-backed securities, and this demand is often affected by how investors expect Fed hikes to affect the broader economy. .

As inflation starts to come down, mortgage rates should too. But the Fed indicated it is watching for continued signs of slowing inflation, and it won’t stop hiking rates anytime soon — though it may start opting for smaller ones. increase in subsequent meetings.

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