Today’s Mortgage Rates Fall Again – December 18, 2024 Update

Good news for anyone eyeing a home purchase or thinking of refinancing: today’s mortgage rates have dropped slightly, as of December 18, 2024. According to Zillow’s latest data, the average 30-year fixed mortgage rate has dipped to 6.45%, the 20-year fixed rate is now at 6.30%, and the 15-year fixed rate stands at 5.82%. This is a welcome shift, particularly with many of us closely following the Federal Reserve's announcements about interest rates and how these changes will shape the housing market.

Today's Mortgage Rates Fall Again – December 18, 2024 Update

Here's a quick look at the key takeaways:

• Current 30-year mortgage rate: 6.45%
• 20-year mortgage rate: 6.30%
• 15-year mortgage rate: 5.82%
• Expected Fed Rate Cut: Many experts anticipate a decrease of 25 basis points.
• Market Forecast: We may see some stability in mortgage rates, with possibly slight reductions in the near future.

It's always a bit of a thrill when we see even a small drop in mortgage rates. With rates trending upward over the past few months, this slight downturn is significant and worth exploring in more detail. Let's dive into what these current rates mean, why they matter, and how they might influence your financial decisions.

Understanding Current Mortgage Rates

The numbers are in, and here’s a snapshot of today’s national average mortgage rates, according to Zillow:

• 30-Year Fixed: 6.45%
• 20-Year Fixed: 6.30%
• 15-Year Fixed: 5.82%
• 5/1 ARM: 6.62%
• 7/1 ARM: 6.54%
• 30-Year VA (Veterans Affairs): 5.91%
• 15-Year VA: 5.48%

Whether you’re a first-time buyer, a seasoned homeowner looking to upgrade, or considering a refinance, these figures give you valuable information for planning ahead.

Focusing on the 30-Year Fixed Rate

The 30-year fixed mortgage remains the go-to choice for many, and for good reason. Its appeal lies in the lower monthly payments and the comfort of knowing what you'll owe each month. The fact that this rate has decreased today means more people can lock in manageable and predictable expenses, which can be a real help in budgeting for the long haul.

Let's think about a $300,000 loan with an interest rate of 6.45%. This would mean a monthly payment of about $1,896 (this includes both the principal and the interest). Over 30 years, you’d end up paying roughly $784,000 in total, with a hefty $484,000 going towards interest. The stability this type of mortgage offers is a big draw for many homeowners.

The Pros and Cons of 30-Year Mortgages

On one hand, longer mortgage terms mean smaller monthly bills and budget stability. But on the other, you end up paying much more in interest over the life of the loan compared to shorter-term options.

Take for instance a 15-year fixed mortgage at a rate of 5.82%. The monthly payments on the same $300,000 loan would jump to about $2,526, but the total interest paid would be just about $176,000. This clearly shows the trade-off between affordability now and total costs later.

The Federal Reserve Meeting is Key

Today is also the day of the Federal Reserve’s final meeting for the year, and all eyes are on them. Many economists believe that the central bank will announce a 25-basis-point decrease in the federal funds rate. This action could directly influence mortgage rates. The general thinking is: if the Fed lowers rates, mortgage rates may drop a bit too, but don't expect dramatic changes.

What’s Ahead for Mortgage Rates?

While today's news is encouraging for those in the market, the future of mortgage rates is still a bit of a question mark. Some experts are predicting a slow decline throughout 2025, largely depending on how the economy shapes up and any political shifts that happen. People are also paying close attention to what Fed Chair Jerome Powell says, hoping to pick up clues about the central bank's next moves.

Refinance Rates: What You Should Know

For those already owning a home and considering refinancing, here are the current national average refinance rates, as reported by Zillow:

• 30-Year Fixed Refinance: 6.50%
• 20-Year Fixed Refinance: 6.27%
• 15-Year Fixed Refinance: 5.83%
• 5/1 ARM Refinance: 6.11%
• 7/1 ARM Refinance: 6.56%

These rates provide a good baseline for homeowners who are thinking about changing their mortgage terms.

Adjustable-Rate Mortgages: A Closer Look

ARMs, or Adjustable-Rate Mortgages, feature an initial fixed-rate period followed by a period where the rate can change based on market conditions. Think of a 5/1 ARM, where the interest rate remains the same for the first five years and then adjusts annually. Usually, these loans come with lower initial rates than fixed-rate options, making them appealing for those planning to move or refinance before the adjustment period begins. But there's also the possibility of facing higher payments once that fixed period is over. For now, the 5/1 ARM rate is 6.62%.

Looking at Market Trends and Future Predictions

It's important to remember that today's small drop in mortgage rates is happening against a broader economic backdrop. Home prices continue to be high, making affordability a significant concern for many potential buyers. If mortgage rates do gradually go down as expected, we could see a rise in housing market activity, with buyers more willing to jump in.

Experts are saying we'll see some minor decreases in mortgage rates but aren't expecting big drops unless there are major changes in the economy. Factors like job rates, inflation levels, and what happens in politics all influence these interest rates.

Final Thoughts

Today's mortgage rates drop a bit, which is a welcome break in these uncertain times. The decisions you make about buying or refinancing are huge, and they can impact your financial well-being for years to come. Staying up-to-date on these changes is essential if you're thinking about making a move in the housing market.

Whether you're looking to buy your first place, move to something bigger, or refinance an existing mortgage, having solid data and staying informed about the market will help you make the right decisions. It's always wise to speak to financial experts or mortgage professionals, as they can provide personalized advice to fit your situation.