Current Mortgage Rates

Mortgage rates hit another multiyear low this week as stock market volatility, the ongoing trade conflict with China and growing concerns about a recession pushed rates lower.  This week's developments followed the Federal Reserve's decision to cut interest rates for the first time in over a decade.  The Fed pointed to slowing global economies, lackluster business investment and sluggish inflation in lowering the target range for the Federal Funds rate a quarter point to 2.000% - 2.250%.

The Fed had signaled its move for months and the only question was how big of a rate cut the Fed would deliver.  Although some analysts had called for a half point rate cut, the 0.250% interest rate reduction was in line with most market forecasts.  The Fed lowered rates in response to emerging economic risks despite a strong labor market and better than expected U.S. economic growth in the second quarter.

This week, the threat of more trade tariffs and new recession warning signs caused a significant drop in the stock market and pushed bond yields lower.  Concerns about the the economy in particular have increased expectations that the Fed could cut rates again sooner rather than later, which caused mortgage rates to fall for most programs. 

The rate for a 30 year fixed rate mortgage dipped 0.125% to 3.500%, a three year low, while the interest rate for a 15 year fixed rate mortgage fell to 3.000%.  The rate on a 5/1 adjustable rate mortgage (ARM) also declined 0.125% to 3.250%, as shorter term financing remains attractive.  Jumbo mortgage rates improved to 3.625%, slightly higher than conforming loan rates.  Non-owner occupied mortgage rates also shed 0.125%, falling to 4.000%, which is an attractive financing option for rental property buyers.  FHA mortgage rates and VA mortgage rates were flat at 3.250%, with both programs appealing to borrowers focused on low or no down payment programs, especially first-time home buyers.  

After nine rate increases over four years, the Fed's decision to lower interest rates for the first time since 2008 marked a significant shift in policy.  The Fed also reiterated a more flexible strategy that enables it to loosen (or tighten) monetary policy as economic conditions dictate.  Although nothing is guaranteed when it comes to the Fed or mortgage rates, the market is anticipating at least one more quarter point rate decrease before the end of the year, which is welcome news for borrowers and a housing market that has been hindered by fluctuating rates and limited supply.

If the recent market turmoil continues we would expect the Fed to act again sooner rather than later, potentially at its September meeting, which could push mortgage rates down further.  

Because interest rates are impossible to predict, prospective borrowers looking to buy a home or refinance should take advantage of current low mortgage rates, as the market can change quickly.  Additionally, as lenders react differently to changing market conditions, we have seen a wider variation in mortgage rate pricing, which means borrowers benefit more by shopping multiple lenders.

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