Mortgage rates have been frustratingly high this year, leaving current homeowners with little financial incentive to refinance. Now that the Federal Reserve is cutting interest rates, mortgage refinance rates are expected to get cheaper, which should help improve options for households. The Fed is expected to carry out one more rate cut this year at its upcoming Dec. 18 policy meeting. But the outlook for 2025 is cloudier. Economists say the economic policies proposed by the incoming administration could cause price growth to rebound and force the central bank to delay further reductions. Higher inflation and fewer Fed cuts could keep upward pressure on borrowing costs for homeowners. If you’re considering refinancing, it’s a good idea to monitor rates daily or weekly. For more on what experts are forecasting in the mortgage refinance market, check out our weekly mortgage rate forecast. Today’s average mortgage rates on Dec. 17, 2024, compared with one week ago. We use rate data collected by Bankrate as reported by lenders across the US. See all of today’s mortgage rates. Mortgage refinance rates plummeted to a two-year low late this summer, close to 6%, in response to rising unemployment, recession concerns and the Fed’s anticipated interest rate cuts. The expectation was that inflation would continue easing and the Fed would carry out a series of rate cuts in 2025. But then the script flipped. In early October, strong inflation and labor data forced bond market investors to reconsider the pace of additional rate cuts. Bond yields and mortgage rates quickly rebounded, with average 30-year fixed mortgage rates climbing to around 7%. The election of Donald Trump also has market watchers concerned over future economic policies that could drive up the government debt deficit and inflation, neither of which would help borrowing costs. Experts still expect the Fed to cut rates by 0.25% on Dec. 18. After that, however, the central bank has signaled it may adopt a “wait-and-see” approach, holding rates steady for several months to observe inflation and unemployment trends. For homeowners, another rate cut won’t automatically result in lower mortgage refinance rates. Though the Fed’s policy decisions influence the overall direction of borrowing costs, the central bank doesn’t directly set mortgage rates. For refinance rates to improve significantly, several interest rate cuts will be needed, as well as weaker economic data. Given that average refinance rates are hovering around 6.75%, very few homeowners are jumping into the market. The vast majority of homeowners have cheap mortgages, some as low as 2% or 3%, and don’t want to swap them out for more expensive ones. However, homeowners with rates near 8% and higher can save money on their monthly payments by refinancing. The Fed regulates inflation and unemployment through its interest rate adjustments, hiking rates
- Altas taxas de juros de hipoteca têm sido frustrantes este ano, deixando os proprietários atuais com pouco incentivo financeiro para refinanciar.
- Com a redução das taxas de juros pelo Federal Reserve, espera-se que as taxas de refinanciamento de hipotecas fiquem mais baratas, o que deve ajudar a melhorar as opções para os lares.
- Especialistas ainda esperam que o Fed reduza as taxas em 0,25% em 18 de dezembro, mas depois disso, o banco central sinalizou que pode adotar uma abordagem “esperar para ver”, mantendo as taxas estáveis por vários meses para observar as tendências de inflação e desemprego.