Mortgage Interest Rates Today, May 4, 2024 | Rates Drop as the Job Market Cools

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Mortgage rates are down slightly following the release of data showing that the labor market cooled more than expected last month. Average 30-year mortgage rates ticked back below 7% after this report was released, according to Zillow data. 

On Friday, the Bureau of Labor Statistics reported that the US economy added 175,000 jobs in April, way below both the forecast and March's growth. The unemployment rate also ticked up to 3.9%.

Why would labor market data impact mortgage rates? It has to do with something Federal Reserve Chair Jerome Powell said this week.

The softer-than-expected jobs report follows the Fed announcement on Wednesday that it is keeping the federal funds rate steady for now. In a press conference, Powell said that policymakers may need to keep rates high for longer than expected to bring inflation down. But he also noted that "unexpected weakening in the labor market" could push Fed officials to consider lowering rates. 

Once the Fed is able to start cutting the federal funds rate, mortgage rates should trend down. 

One month of cooler labor market data most likely isn't enough to get the Fed to cut rates, but a sustained uptick in the unemployment rate over several months could be. 

This means we'll need at least a few more months of data showing how inflation and the labor market is trending before we get a clearer picture of where mortgage rates will go this year. Investors are currently betting that the first Fed cut will come in September, according to the CME FedWatch Tool, which means we could see rates start to go down as we approach fall.

Current Mortgage Rates

Current Refinance Rates

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Use our free mortgage calculator to see how today's mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you'll also understand how much you'll pay over the entire length of your mortgage.

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

Mortgage Rates for Buying a Home

30-Year Fixed Mortgage Decrease Somewhat (-0.15%)

The current average 30-year fixed mortgage rate is 6.97%, down 15 points from where it was this time last week, according to Zillow data. This rate is up compared to a month ago, when it was 6.58%. 

At 6.97%, you'll pay $663 monthly toward principal and interest for every $100,000 you borrow.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.

20-Year Fixed Mortgage Rates Drop (-0.25%)

The average 20-year fixed mortgage rate is 25 points down from where it was last week, and is sitting at 6.62%. This time last month, the rate was 6.34%.

With a 6.62% rate on a 20-year term, your monthly payment will be $753 toward principal and interest for every $100,000 borrowed.

A 20-year term isn't as common as a 30-year or 15-year term, but plenty of mortgage lenders still offer this option.

15-Year Fixed Mortgage Rates Go Down (-0.24%)

The average 15-year mortgage rate is 6.24%, 24 basis points lower than last week. It's up compared to this time last month, when it was 5.87%.

With a 6.24% rate on a 15-year term, you'll pay $857 each month toward principal and interest for every $100,000 borrowed.

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

7/1 ARM Rates Increase (+0.24%)

The 7/1 adjustable mortgage rate is up 24 basis points from a week ago, currently at 7.54%. It's also up compared to a month ago, when it was at 6.57%. 

At 7.54%, your monthly payment would be $702 toward principal and interest for every $100,000 borrowed — but only for the first seven years. After that, your payment would increase or decrease annually depending on the new rate.

5/1 ARM Rates Inch Up (+0.09%)

The average 5/1 ARM rate is 7.49%, a nine-point increase from last week. It's also up compared to where it was a month ago, when it was 6.73%.

Here's how a 7.49% rate would affect you for the first five years: You'd pay $699 per month toward principal and interest for every $100,000 you borrow.

30-year FHA Rates Tick Down (-0.06%)

The average 30-year FHA interest rate is 6.01% today, which is 14 basis points down from last week. This rate was 5.97% a month ago.

At 6.01%, you would pay $600 monthly toward principal and interest for every $100,000 borrowed.

FHA mortgages are good choices if you don't qualify for a conforming mortgage. You'll need a 3.5% down payment and 580 credit score to qualify.

30-year VA Rates Drop Slightly (-0.14%)

The current VA mortgage rate is 6.21%, 14 basis points lower than this time last week. This rate was 5.89% a month ago.

With a 6.21% rate, your monthly payment would be $613 toward principal and interest for every $100,000 you borrow.

Mortgage Refinance Rates

30-Year Fixed Refinance Rates Fall Slightly (-0.06%)

The average 30-year refinance rate is 7.36%, six basis points lower than last week. It's also down slightly compared to a month ago, when it was 7.50%.

Here's how a 7.36% rate would affect your monthly payments: You'd pay $690 toward principal and interest for every $100,000 borrowed.

Refinancing into a 30-year term can land you lower monthly payments, but you'll ultimately pay more by refinancing into a longer term.

20-Year Fixed Refinance Rates Tick Down (-0.09%)

The current 20-year fixed refinance rate is 6.69%, which is down nine basis points compared to a week ago. This rate was 6.82% this time last month.

A 6.69% rate on a 20-year term will result in a $757 monthly payment toward principal and interest for every $100,000 you borrow.

15-Year Fixed Refinance Rates Decrease a Bit (-0.15%)

The average 15-year fixed refinance rate is 6.42%, which is 15 points lower compared to last week. It's up slightly compared to this time a month ago, when it was at 6.33%.

A 6.42% rate on a 15-year term means you'll pay $867 each month toward principal and interest for every $100,000 borrowed.

Refinancing into a 15-year term can save you money in the long run, because you'll get a lower rate and pay off your mortgage faster than you would with a 30-year term. But it could result in higher monthly payments.

7/1 ARM Refinance Rates Go Up (+0.38%)

The average 7/1 ARM refinance rate is 8.42%, up 38 points from where it was last week. It's way up from a month ago, when it was 6.29%.

Refinancing into a 7/1 ARM with a 8.42% rate means your monthly payment toward principal and interest will be $763 for every $100,000 you borrow. This will be the payment for the first seven years, then your rate will change annually unless you refinance again.

5/1 ARM Refinance Rates Jump (+0.41%)

The 5/1 ARM refinance rate is 8.21%, which is 41 points higher than it was this time last week. It's also up a lot compared to this time last month, when it was 6.38%.

A 8.21% rate will result in a monthly payment of $748 toward principal and interest for every $100,000 borrowed. You'll pay this amount for the first five years of your new mortgage.

30-Year FHA Refinance Rates Fall Slightly (-0.16%)

The 30-year FHA refinance rate is 6.00%, which is 16 points lower than last week. This rate was 5.66% this time last month.

A 6.00% refinance rate would lead to a $600 monthly payment toward the principal and interest per $100,000 borrowed.

30-Year VA Refinance Rates Inch Down (-0.06)

The average 30-year VA refinance rate is 6.03%, which is down six points compared to where it was was last week. This rate was 5.72% a month ago.

At 6.03%, your new monthly payment would be $601 toward principal and interest for every $100,000 you borrow.

Are Mortgage Rates Going Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Mortgage rates also rose dramatically in 2023, though they started trending back down toward the end of the year. Though rates have been somewhat elevated recently, they should go down by the end of 2024. 

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 further. 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.