Mortgage Interest Rates Today, January 28, 2024 | As Rates Ease, Homebuyers are Returning to the Market (2024)

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Homebuyers already appear to be responding to lower mortgage rates.

Though mortgage rates have ticked up a little bit in recent weeks, they're still well below the peaks reached in fall 2023, when 30-year mortgage rates neared 8%. Now, rates remain over a full percentage point below that, even with recent fluctuations.

In December, pending home sales increased 8.3% from the month before, according to the National Association of Realtors.

"The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices," Lawrence Yun, NAR's chief economist, said in the press release. "Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand."

Most major forecasts call formortgage rates to go down further this year, which should help even more hopeful buyers afford homeownership.

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Use ourfree mortgage calculatorto see how today's interest rates will affect your monthly payments.

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30-Year Fixed Mortgage Rates

This week's average 30-year fixed mortgage rate is 6.69%, according to Freddie Mac. This is a nine-basis-point increase from the previous week.

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.

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 or adjustable rates.

15-Year Fixed Mortgage Rates

Average 15-year mortgage rates inched down to 5.96% last week, according to Freddie Mac data. This is a 20-point increase since the week before.

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.

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve has increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has 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 hikes to affect the broader economy.

The Fed has indicated that it's likely done hiking rates and that it could start cutting this year. This has allowed mortgage rates to trend down somewhat.

When Will Mortgage Rates Go Down?

Mortgage rates increased dramatically over the last two years, but they've been falling in recent months, and are expected to drop further this year.

In December 2023, the Consumer Price Index rose 3.4% year-over-year. Inflation has slowed significantly since it peaked last year, which is good news for mortgage rates.

For homeowners looking toleverage their home's valueto cover a big purchase — such as a home renovation — ahome 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 ratesare relatively low compared to other loan options, including credit cards and personal loans.