Mortgage Interest Rates Today, July 4, 2024 | Rates Go Up, but They Should Ease by the End of the Year
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Mortgage rates increased overall this week, with 30-year mortgage rates ticking up closer to 7%, according to Freddie Mac. But the latest economic data continues to suggest that rates should ease throughout the remainder of 2024.
"Both new home and pending home sales are down, causing active listings to rise," Sam Khater, Freddie Mac's chief economist, said in a press release. "We are still expecting rates to moderately decrease in the second half of the year and given additional inventory, price growth should temper, boding well for interested homebuyers."
As the economy cools, the Federal Reserve is expected to start lowering the federal funds rate, removing some of the upward pressure off of mortgage rates and allowing them to trend down.
On Wednesday, softer-than-expected private payroll data from ADP suggested that the labor market is continuing to cool off. Recent inflation data has shown signs of slowing as well.
Right now, investors think it's likely that the Fed will start cutting rates in September, and that we could get two rate cuts by the end of the year, according to the CME FedWatch Tool.
This means mortgage rates should go down in the coming months and years. If you're thinking about postponing your home search until rates are lower, you might have better luck in 2025.
Today's mortgage rates
Today's refinance rates
Mortgage Calculator
Use our free mortgage calculator to see how today's interest rates will affect your monthly payments:
By clicking on "More details," you'll also see how much you'll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
Mortgage Rate Projection for 2024
Mortgage rates started ticking up from historic lows in the second half of 2021 and increased dramatically in 2022 and throughout most of 2023.
Many forecasts expect rates to fall this year now that inflation has been coming down. In the last 12 months, the Consumer Price Index rose by 3.3%. This is a significant slowdown compared when it peaked at 9.1% in 2022, but we'll likely need to see more slowing before rates can drop substantially.
For homeowners looking to leverage their home's value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you'd do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
When Will House Prices Come Down?
We aren't likely to see home prices drop this year. In fact, they'll probably rise.
Fannie Mae researchers expect prices to increase 4.8% in 2024 and 1.5% in 2025, while the Mortgage Bankers Association expects a 4.5% increase in 2024 and a 3.3% increase in 2024.
Sky high mortgage rates have pushed many hopeful buyers out of the market, slowing homebuying demand and putting downward pressure on home prices. But rates have since eased, removing some of that pressure. The current supply of homes is also historically low, which will likely push prices up.
What Happens to House Prices in a Recession?
House prices usually drop during a recession, but not always. When it does happen, it's generally because fewer people can afford to purchase homes, and the low demand forces sellers to lower their prices.
How Much Mortgage Can I Afford?
A mortgage calculator like the one above can help you determine how much house you can afford. Play around with different home prices and down payment amounts to see how much your monthly payment could be, and think about how that fits in with your overall budget.
Typically, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means your entire monthly mortgage payment, including taxes and insurance, shouldn't exceed 28% of your pre-tax monthly income.
The lower your rate, the more you'll be able to borrow, so shop around and get preapproved with multiple mortgage lenders to see who can offer you the best rate. But remember not to borrow more than what your budget can comfortably handle.