Today's Mortgage Rates | All the Forces Keeping Mortgage Rates High Right Now

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• Mortgage rates for November 29, 2024, are hovering in the mid-6% range.
• Rates have increased recently in response to strong economic data and this month's election.
• Where mortgage rates go in 2025 depends on how the economy evolves and whether the Fed is able to keep lowering rates.

Right now, mortgage rates are lower than they were this time last year, when 30-year rates were above 7%, according to Zillow data. But they've increased substantially since September, when rates dropped to 5.74%, their lowest level since early 2023. 

Why did rates go up over the past couple of months? A combination of strong economic data and the bond market's reaction to Donald Trump winning the election.

Mortgage rates were initially heading down in anticipation of cooling economic conditions and the Federal Reserve starting to lower the federal funds rate. But in recent months, labor market data has been stronger than anticipated, and inflation has remained a bit high. 

Many economists and investors also believe that some of President-elect Trump's proposed policies, especially those around tariffs and immigration, could reignite inflation.

If inflation starts to rise, the Fed would likely need to raise its benchmark rate to try to bring it back down. The possibility of this happening has pushed bond yields higher, which have led to higher mortgage rates as well.

What Are Today's Mortgage Rates?

What Are 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.

Current 30-Year Mortgage Rates

Average 30-year mortgage rates are hovering around the mid-6% range, according to Zillow data. Rates increased substantially last month, averaging around 6.24% in October. 

The 30-year fixed-rate mortgage is the most popular 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.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms, like a 15-year mortgage. 

Current 15-Year Mortgage Rates

Average 15-year mortgage rates are in the high 5% range, according to Zillow data. In October, 15-year rates averaged 5.56%, but they've been higher in recent weeks.

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.

Current Mortgage Refinance Rates

Refinance rates are also elevated. In October, 30-year refinance rates averaged 6.35%, while 15-year refinance rates were around 5.67%. They're even higher this month.

How Much Do Mortgage Rates Need to Drop to Refinance?

If you're wondering if you should refinance now, you'll need to crunch the numbers to see if it makes sense. Some experts advise only refinancing if you can reduce your rate by a percentage point or more, but it really comes down to whether it works for your individual circumstances.

If you can save enough each month by refinancing that you can recoup your costs in a reasonable amount of time, it might be worth it. You can calculate this by dividing your closing costs by the amount you're saving on your monthly mortgage payment. So, if you paid $3,000 to refinance and were able to lower your monthly payment by $200, it would take you 15 months to break even on your refinance. 

5-Year Mortgage Rate Trends

Here's how 30-year and 15-year mortgage rates have trended over the last five years, according to Freddie Mac data.

What Factors Influence Mortgage Rates?

Mortgage rates are determined by a variety of different factors, including larger economic trends, Federal Reserve policy, your state's current mortgage rates, the type of loan you're getting, and your personal financial profile.

While many of these factors are out of your control, you can work on improving your credit score, paying off debt, and saving for a larger down payment to ensure you get the best rate possible. 

How Does the Fed Rate Affect Mortgage Rates?

The Fed increased the federal funds rate dramatically in 2022 and 2023 to try to slow economic growth and get inflation under control. Inflation has since slowed significantly, but it's still a bit above the Fed's 2% target rate.

Mortgage rates aren't directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed policy to affect the broader economy. 

Fed officials lowered rates at their meetings in September and November, and they're expected to continue cutting rates at future meetings. This should help mortgage rates trend down.

Will Mortgage Rates Drop in December 2024?

Mortgage rates have been elevated in November, but where they go next depends on a lot of unknowns, so we'll need more data to see how inflation and the labor market are trending. In general, rates aren't expected to drop again until next year.

How Low Will Mortgage Rates Go?

Mortgage rates are unlikely to drop back down to the historic lows of 2020 and 2021, when 30-year fixed rates fell below 3%. But rates are expected to continue to ease throughout the next year or two, and it's possible rates could ultimately settle in closer to 6% in the next couple of years. 

Will Mortgage Rates Go Down in 2025? 

Most major forecasts expect mortgage rates to go down throughout 2025 as the Fed continues to lower its benchmark rate. But because mortgage rates are influenced by the economy, this forecast could change depending on how the economy evolves in 2025.