Current Mortgage Rates

Mortgage rates remain near a multi-year low in response to the Federal Reserve's widely expected decision to keep interest rates unchanged at its January meeting.  The Fed's move, or lack thereof, attempts to balance a strong job market and household spending with low inflation and global economic uncertainty.  This is the second meeting in a row that the Fed held the target range for the Federal Funds rate at 1.500% to 1.750%.

The meeting statement and subsequent comments by Chair Jerome Powell offered little to suggest that the Fed would deviate from its current patient approach to monetary policy.  Although the Fed continues to monitor the U.S. and global economies, including the impact of international health-related risks, most signs point to interest rates staying at their current level for the foreseeable future.  After three interest rate cuts in 2019, it appears that the Fed's strategy has shifted firmly into wait and see mode in 2020. 

The Fed's actions, combined with tepid Q4 GDP growth, reduce the possibility of a near-term rate hike despite a strong stock market, progress on multiple trade agreements and a robust jobs report that showed unemployment at a 50 year low.  This news had a stabilizing effect on mortgage rates, which remain low across all loan programs.

The rate for a 30 year fixed rate mortgage stayed at 3.375%, while the rate for a 15 year fixed rate mortgage held at 3.000%.  Jumbo mortgage rates were flat at 3.500%, slightly higher than conforming loan rates.  The rate on a 5/1 adjustable rate mortgage (ARM) was also steady at 3.125%, as shorter term financing remains a less expensive option for risk tolerant borrowers.  In more positive news, FHA and VA mortgage rates were unchanged at 3.250%, with both programs remaining attractive to borrowers focused on low or no down payment programs, especially first-time home buyers.  Non-owner occupied mortgage rates were stable at 3.625%, offering an attractive financing option for rental property buyers.

After nine increases over four years, the Fed's decision to lower interest rates in 2019 for the first time in over a decade represented an important policy change, although the rate cutting phase appears to in the past as demonstrated by the first Fed meeting of 2020.

Going forward, we expect the Fed to apply a more flexible strategy that enables it to loosen or tighten monetary policy as economic conditions evolve, although any near-term moves are unlikely.  While the Fed continues to reiterate its measured outlook, the question is how long rates will stay at this level in light of generally favorable economic news and a rising equity market.

Because rates are impossible to predict, prospective borrowers looking to buy a home or refinance should take advantage of current low mortgage rates.  Additionally, as lenders react differently to changing market dynamics, we have seen a wider range in pricing, which means borrowers benefit more by comparing multiple lenders.

Market conditions constantly shift, so we continue to actively monitor the market for new developments.  Borrowers should check the FREEandCLEAR rate tables regularly to review personalized, updated mortgage rates and fees for lenders in their area.  Our lender tables are free to use and require no personal information.