Key Rates Move Higher for Homebuyers: Mortgage Rates for June 4, 2024

The average for a 30-year fixed mortgage is 7.18% today, up 0.07% from a week ago. The average interest rate for a 15-year fixed mortgage was 6.69%, up 0.08% from the same time last week. To see how mortgage rates are moving, see the chart below.

With inflation data not improving, the Federal Reserve is pushing for a rate cut. Although mortgage rates may still decline later in the year, housing market forecasts change regularly in response to economic data, geopolitical events and more.

Today’s average mortgage rates

A mortgage

Refinancing

Today’s average mortgage rates on June 4, 2024 compared to one week ago. We use interest rate data collected by Bankrate as reported by lenders in the US.

---

When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest price. Enter your information here to receive a personalized quote from one of CNET’s partner lenders.

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

---

What term and type of mortgage should I choose?

Every mortgage has a loan term or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20-, and 40-year mortgages also exist. With a fixed rate mortgage, the interest rate is set for the term of the loan, which offers stability. With an adjustable rate mortgage, the interest rate is fixed only for a certain period of time (usually five, seven or 10 years), after which the rate is adjusted annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home for the long term, but adjustable-rate mortgages can offer lower interest rates up front.

30 year fixed rate mortgages

The average 30-year fixed mortgage rate today is 7.18%. The 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 will have a lower monthly payment.

15-year fixed-rate mortgages

Today, the average interest rate for a 15-year fixed mortgage is 6.69%. Although you’ll have a larger monthly payment than a 30-year fixed mortgage, a 15-year loan typically 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 variable rate mortgage has an average interest rate of 6.85% today. You’ll typically get a lower introductory rate with a 5/1 ARM for the first five years of the mortgage. But you may 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 may be a good option.

Are mortgage rates considered high right now?

Over the past few years, high inflation and aggressive rate hikes by the Federal Reserve have pushed mortgage rates up from record lows during the pandemic. Since last summer, the Fed has consistently kept the federal funds rate at 5.25% to 5.5%. Although the central bank does not directly set mortgage ratesthe high federal funds rate makes borrowing more expensive, including for home loans.

Mortgage rates change daily, but average rates have hovered between 6.5% and 7.5% since late last fall. Today’s homebuyers have less room in their budgets to afford housing costs due to high mortgage rates and high home prices. Limited housing inventory and low wage growth also contribute affordability crisis and keeping mortgage demand low.

Will we see lower mortgage rates in 2024?

Most experts in the housing market predict rates will end the year between 6% and 6.5%. Ultimately, a more affordable mortgage market will depend on how quickly the Fed starts to cut interest rates. The central bank may start cutting interest rates in the autumn, but this will depend on how the economy develops in the coming months.

Mortgage rates vary for many reasons: demand, supply, inflationmonetary policy, job data and market expectations. Homebuyers won’t see lower prices overnight, and it’s unlikely there will ever be a return to 2-3% mortgage interest we saw between 2000 and early 2022.

“We expect mortgage rates to come down to around 6.5% by the end of this year, but there’s still a lot of volatility that I think we might see,” said Daryl Fairweatherchief economist at Redfin.

Each month brings a new set of inflation and labor data which could affect the direction of mortgage rates, he said Odette Kushi, Deputy Chief Economist at First American Financial Corporation. “The continued slowdown in inflation, the slowing economy and even geopolitical uncertainty could contribute to lower mortgage rates.” On the other hand, data that signals an upside risk to inflation could lead to higher rates,” Kushi said.

Here’s a look at where some major housing authorities expect average mortgage rates to reach.

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 budget and try to stay within your means. CNET’s Mortgage Calculator below can help homebuyers prepare for monthly mortgage payments.

Where can I find the best mortgage rates?

Although 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: Although a 20% down payment is not required, a larger down payment means taking out a smaller mortgage, which will help you save on interest.
2. Increase your credit score: You can qualify for a conventional mortgage with a credit score of 620, but a higher score of at least 740 will get you better rates.
3. Pay off the debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Having no other debt will put you in a better position to handle your monthly payments.
4. Loans and research 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. Search for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.