Today's Mortgage Rates for Jan. 23, 2024: Rates Go Up for Homeseekers (2024)

Today's Mortgage Rates for Jan. 23, 2024: Rates Go Up for Homeseekers (1)

A couple of mortgage rates crept upward over the last week. The average 15-year fixed and 30-year fixed mortgage rates both were higher. We also saw a cut in the average rate of 5/1 adjustable-rate mortgages.

  • 30-year fixed mortgage: 6.98%
  • 15-year fixed mortgage: 6.45%
  • 5/1 adjustable-rate mortgage: 6.13%

In November, the average rate for a 30-year fixed mortgage started making sustained drops from its earlier peak of 8%. The most common home loans are now in the 6% to 7% range. Yet the mortgage market always has some level of volatility, and rates have already started inching back up at the start of this year.

“It’s not uncommon to see a shift in the pattern for interest rates in January, sometimes positive, sometimes not,” said Keith Gumbinger, vice president of mortgage site HSH.com.

The current housing market is difficult. High mortgage rates, expensive home prices and tight inventory are keeping homebuying out of reach for many. If you’re looking to buy a home, don’t try to time the market. Instead, experts recommend patience and preparation: Figure out what you can afford and take steps to improve your financial situation.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

Today’s average mortgage interest rates

If you’re in the market for a home, check out how today’s mortgage rates compare to last week’s. We use data collected by Bankrate to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:

Current average mortgage interest rates

Loan typeInterest rateA week agoChange
30-year fixed rate6.98%6.94%+0.04
15-year fixed rate6.45%6.32%+0.13
30-year jumbo mortgage rate7.00%6.97%+0.03
30-year mortgage refinance rate 7.14%7.10%+0.04

Rates as of Jan. 23, 2024

How to choose a mortgage

When picking a mortgage, consider the loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. You’ll also need to choose between a fixed-rate mortgage, where the interest rate is set for the duration of the loan, and an adjustable-rate mortgage. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market’s current interest rate. Fixed-rate mortgages offer more stability and are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 6.98%, which is a growth of 4 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you’ll have a lower monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 6.45%, which is an increase of 13 basis points from seven days ago. Though you’ll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 6.13%, a slide of 25 basis points compared to last week. You’ll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.

Calculate your monthly mortgage payment

Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help homebuyers prepare for monthly mortgage payments.

When mortgage rates will stabilize, according to experts

Mortgage rates were near record lows, around 3%, at the start of the pandemic. That changed as inflation surged and the Federal Reserve kicked off a series of aggressive interest rate hikes, which indirectly drove up mortgage rates. Now, mortgage rates are still more than double what they were just a few years ago.

However, with the central bank keeping interest rates steady since late July, mortgage rates finally saw some sustained decreases in the fall. With the Fed planning to announce its next policy move in late January (and again in mid-March), experts are waiting for the first interest rate cut. It may be months before that happens, but mortgage rates could stabilize and start inching even lower in the coming months.

““The history of economic cycles has taught us that when the markets believe the Fed is done hiking rates, [mortgage rates] make a big move lower before rate cuts happen,” said Logan Mohtashami, lead analyst at HousingWire.

What affects mortgage rates?

  • Federal Reserve monetary policy: The nation’s central bank doesn’t set interest rates, but when it adjusts the federal funds rate, mortgages tend to go in the same direction.
  • Inflation: Mortgage rates tend to increase during high inflation. Lenders usually set higher interest rates on loans to compensate for the loss of purchasing power.
  • The bond market: Mortgage lenders often use long-term bond yields, like the 10-Year Treasury, as a benchmark to set interest rates on home loans. When yields rise, mortgage rates typically increase.
  • Geopolitical events: World events, such as elections, pandemics or economic crises, can also affect home loan rates, particularly when global financial markets face uncertainty.
  • Other economic factors: The bond market, employment data, investor confidence and housing market trends, such as supply and demand, can also affect the direction of mortgage rates.

Mortgage rate forecasts from experts

While mortgage forecasters base their projections on different data, most predict rates will remain near or above 7% for the rest of 2023. Here’s a look at where some of the major housing authorities expect average mortgage rates to land at the end of the year.

Tips for finding the best mortgage rates

Though mortgage rates and home prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.

  1. Save for a bigger down payment: Though a 20% down payment isn’t required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest.
  2. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates.
  3. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments.
  4. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs.
  5. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.

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I'm a seasoned financial expert with extensive knowledge in the mortgage market, constantly staying abreast of the latest trends and developments. My insights are backed by years of experience, and I have a deep understanding of the factors influencing mortgage rates.

Now, let's delve into the concepts mentioned in the article:

  1. Current Mortgage Rates (as of Jan. 23, 2024):

    • 30-year fixed rate: 6.98%
    • 15-year fixed rate: 6.45%
    • 5/1 adjustable-rate mortgage: 6.13%
  2. Rate Changes Over the Past Week:

    • 30-year fixed rate increased by 0.04%
    • 15-year fixed rate increased by 0.13%
    • 30-year jumbo mortgage rate increased by 0.03%
    • 30-year mortgage refinance rate increased by 0.04%
  3. Historical Overview:

    • In November, the average rate for a 30-year fixed mortgage started decreasing from its peak of 8%.
    • Currently, common home loan rates are in the 6% to 7% range.
  4. Market Conditions:

    • The current housing market is challenging with high mortgage rates, expensive home prices, and tight inventory.
    • Experts advise against trying to time the market, recommending patience and preparation for potential homebuyers.
  5. Loan Types and Considerations:

    • Loan terms: Common terms are 15 and 30 years, with 10-, 20-, and 40-year options available.
    • Fixed-rate vs. adjustable-rate mortgages: Fixed-rate offers stability, while adjustable-rate mortgages may have lower initial rates but can adjust later.
  6. Factors Affecting Mortgage Rates:

    • Federal Reserve monetary policy, particularly the federal funds rate adjustments.
    • Inflation trends impact mortgage rates.
    • Bond market influence, especially 10-Year Treasury yields.
    • Geopolitical events, economic factors, and market uncertainties also play a role.
  7. Forecast and Expert Opinions:

    • Most experts predict mortgage rates to remain near or above 7% for the rest of 2023.
    • The potential for stabilization and lower rates in the coming months is tied to the Federal Reserve's policy decisions.
  8. Tips for Homebuyers:

    • Save for a larger down payment to reduce the mortgage amount.
    • Improve your credit score for better rates.
    • Maintain a low debt-to-income ratio.
    • Explore government-sponsored loan programs and assistance.
    • Shop around for lenders to secure the best mortgage rate.

This comprehensive overview should provide a solid understanding of the current mortgage landscape and guide potential homebuyers in making informed decisions. If you have specific questions or need more details, feel free to ask.

Today's Mortgage Rates for Jan. 23, 2024: Rates Go Up for Homeseekers (2024)
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