Current Mortgage Rates

Mortgage rates inched higher for several loan programs in response to positive economic news including signs of a potential trade deal.  As we saw this week, good news can sometimes push interest rates up although rates for multiple mortgage programs were flat and remain attractive overall.

These developments follow the Federal Reserve's decision to cut interest rates a quarter point at its October meeting as expected.  This marked the third rate decrease of the year after the Fed lowered rates by a quarter point at its July and September meetings.  Although the Fed offered minimal guidance for its future strategy, lowering rates multiple times over the past six months signals a significant shift in monetary policy after more than a decade of increasing or holding rates steady.

In its statement, the Fed highlighted lackluster business investment, sluggish exports and below-target inflation in trimming the target range for the Federal Funds rate 0.250% to 1.500% - 1.750%.  The Fed's move is designed to cushion the U.S. economy from the ongoing impact of international trade disputes and slowing economic growth domestically and abroad.  The Fed's decision to lower interest rates was not unanimous with two Fed members voting to keep rates unchanged.

Although an October rate decrease was all but guaranteed, the Fed is taking a wait-and-see approach going forward, suggesting additional near term rate decreases are unlikely.  News that the U.S. economy grew faster than expected in the third quarter and progress on a trade resolution provides additional support for the Fed's patient approach.

This week's news pushed the stock market higher while also applying upward pressure to mortgage rates.  Despite this small increase, rates remain low, presenting an attractive opportunity for borrowers.

The rate for a 30 year fixed rate mortgage increased 0.125% to 3.625%, while the rate for a 15 year fixed rate mortgage moved higher to 3.125%.  The rate on a 5/1 adjustable rate mortgage (ARM) also climbed 0.125% to 3.500%, as shorter term financing remained appealing for more risk tolerant borrowers.  In more positive news, FHA and VA mortgage rates held steady at 3.125%, with both programs appealing to borrowers focused on low or no down payment programs, especially first-time home buyers.  Non-owner occupied mortgage rates were flat at 4.000%, offering an attractive financing option for investment property buyers.  Jumbo mortgage rates also remained at 3.750%, closing the gap with conforming loan rates.  

After nine rate increases over four years, the Fed's decision to lower interest rates for the first time since 2008 represented an important policy change.  The Fed also reiterated a more flexible strategy that enables it to loosen or tighten monetary policy as economic conditions evolve, although another rate reduction seems unlikely following the Fed's latest statement.

While the Fed's future actions are less predictable, the multiple rate cuts so far this year are welcome news for borrowers and a housing market that has been slowed by fluctuating rates and limited affordable inventory.

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 range in mortgage rate pricing, which means borrowers benefit more by comparing multiple lenders.

Mortgage rates change constantly, 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 for lenders in their area.  Our rate tables are free to use and require no personal information.