Thursday, July 25, 2024

Current mortgage rates as of June 17, 2024

Must read

The current average interest rate for a fixed-rate, 30-year conforming mortgage loan in the United States is 6.834%, according to the most recent data available from mortgage technology and data company Optimal Blue. Read on to see average rates for different types of mortgages and how the current rates compare with the last reported day prior. 

30-year mortgage rates

30-year conforming

The average interest rate, per the most current data available as of this writing, is 6.834%. That’s up from 6.810% the last reported day prior. 

30-year jumbo

What exactly is a “jumbo mortgage” or “jumbo loan”? Simply put, it exceeds the maximum amount for a normal (conforming) mortgage. Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency set this maximum.

The average jumbo mortgage rate, per the most current data available as of this writing, is 7.025%. That’s down from 7.144% the last reported day prior. 

30-year FHA

The Federal Housing Administration provides mortgage insurance to certain lenders, and the lenders in turn can offer the consumer a better deal on aspects such as being able to qualify for a mortgage, potentially making a smaller down payment, and possibly getting a lower rate. 

The average FHA mortgage rate, per the most current data available as of this writing, is 6.640%. That’s down from 6.677% the last reported day prior. 

30-year VA

A VA home loan is offered by a private lender, but the Department of Veterans Affairs guarantees part of it (reducing risk for the lender). They are accessible if you’re a U.S. military servicemember, a veteran, or an eligible surviving spouse. Such loans may sometimes allow the purchase of a house with no down payment at all. 

The average VA home loan rate, per the most current data available as of this writing, is 6.334%. That’s down from 6.345% the last reported day prior. 

30-year USDA

The U.S. Department of Agriculture operates programs to help low-income applicants achieve homeownership. Such loans can help U.S. citizens and eligible noncitizens purchase a home with no down payment. Note that there are stringent requirements to be able to qualify for a USDA home loan, such as income limits and the home being in an eligible rural area.

The average USDA home loan rate, per the most current data available as of this writing, is 6.589%. That’s down from 6.711% the last reported day prior. 

15-year mortgage rates

A 15-year mortgage will typically mean higher monthly payments but less interest paid over the life of the loan. The average rate for a 15-year conforming mortgage, per the most current data available as of this writing, is 6.039%. That’s up from 6.004% the last reported day prior.  

Why do mortgage rates change?

While your personal credit profile will of course impact the mortgage rate you’re offered, there are also factors outside your control that affect your rate. Some important factors include:

  1. What the Fed is doing. When the Federal Reserve raises or lowers the federal funds rate, lenders will typically increase or decrease the interest rates on their financial products accordingly. While there’s a lot that goes into this, the very basic explanation is that the Fed uses this mechanism to increase or decrease the amount of money at play by making it easier or more difficult for consumers and businesses to borrow. 
  2. Where inflation is at. You may be thinking, “Aren’t inflation and the Fed’s actions pretty much the same factor?” The answer is “not quite.” The Fed does use its ability to raise or lower rates to combat inflation. But lenders can also take action on their own, such as increasing rates to make a profit when inflation is high. 
  3. The economy in general. How fast is the economy growing? What’s the supply of homes and the demand to purchase them look like? These are just a couple examples of factors lenders can weigh when raising or lowering mortgage rates. 

Learn more: How are mortgage interest rates set by lenders?

What type of mortgage should you apply for?

There’s no one-size-fits-all answer to this question. Most mortgages are conventional (as opposed to government-backed) but if you meet certain criteria, a government-backed loan may be a more affordable way to begin your homeownership journey. 

A jumbo mortgage can help if you need to purchase a home that’s too expensive for a conforming mortgage, but be aware this may cost you more over the life of the loan. 

Finally, be thoughtful if you decide to go for an adjustable-rate mortgage (ARM). These may start out with attractive, low rates, which then increase after a short period of time.

The data presented in this article reflect averages for fixed-rate mortgages. 

If you aren’t comfortable rate shopping on your own, a mortgage broker may be able to help you (for a fee) identify the best mortgage offer available for your specific circumstances.

How high have mortgage rates been in the past?

While mortgage rates may feel sky-high these days compared to the sub-3% rates some homebuyers scored in 2020 and 2021, what we’re seeing currently isn’t that strange when compared with historical data on mortgage rate averages. Below are a couple charts from the Federal Reserve Economic Data (FRED for short) online database for context.  

30-year fixed-rate mortgage historical trends

If you think rates between 6% and 8% today are scary, consider September through November of 1981, which saw the average rate hovering between 18% and 19%, according to FRED.

Check out the FRED 30-year mortgage rate chart:

15-year fixed-rate mortgage historical trends

Rates today on 15-year mortgages, as shown in the Optimal Blue data above, are roughly on par or even slightly lower than what we see during many previous periods. For example, take a look at FRED data for the end of 1994 and beginning of 1995, when rates neared 9%.

See the FRED 15-year mortgage rate chart:

Frequently asked questions

What’s a good rate for a mortgage?

With the market the way it is, applicants with good-to-excellent credit can likely hope to see an interest rate ranging from 6% to 8% on their mortgage offers. But if your credit score is somewhere in the low 600s rather than the coveted 850, you may expect rates exceeding 8% if your application is approved. 

Also know that credit score is only one factor impacting the mortgage rate you’re offered, with others including how much you can put toward a down payment, what state you’re in, and how long a mortgage term you’re seeking.

Learn more: Easy ways to check your credit score.

What’s a mortgage rate lock?

Because mortgage rates can fluctuate (even over the course of a day), you may be worried about mortgage rates increasing. In that case, a mortgage rate lock—also known as a lock-in—may let you keep a rate you’re happy with. A mortgage rate lock can typically last 30, 45, or 60 days, and you may have the option to extend your lock if needed.

That said, there are potential cons to getting a mortgage rate lock. If rates go down, you could be stuck at a higher rate. And if your initial lock period doesn’t give you enough time to close, it could be expensive to extend it. 

Also, a mortgage rate lock does not entirely guarantee your rate won’t change under any circumstances. For example, if the appraisal on the house you’re interested in is higher or lower than expected, or if your credit score changes because you missed a payment on an existing debt, that could cause the rate on your impending mortgage to change. 

What’s the difference between interest rate and APR?

The interest rate is exactly what it sounds like, while the APR (annual percentage rate) will be higher because it also reflects any fees you’ll be charged. 
Note that while interest rate and APR differ for mortgages, in other contexts you may hear them used interchangeably—notably for credit card interest rates.

More articles

Latest article