Following a spike just before Christmas this week, new 30-year mortgage rates stood at 7.02%, which is the highest rate in over six months. Other loan types saw mixed rate movements.
| National Averages of Lenders' Best Mortgage Rates | |
|---|---|
| Loan Type | New Purchase |
| The 30-Year Fixed | 7.02% |
| FHA Fixed 30-Year Rate | 6.28% |
| 15-Year Fixed | 6.25% |
| Jumbo 30-Year Fixed | 6.94% |
| 5/6 AR | 7.44% |
| Zillow Mortgage API is available. | |
No matter what type of mortgage you are looking for, rates can vary greatly between lenders. It is wise to compare them regularly and shop around to find the best rate.
Compare current mortgage rates today – December 27, 2024
Today's New Purchase Mortgage Rate Averages
Triggered by last week's Federal Reserve forecast of scaled-back interest rate cuts in 2025, mortgage rates surged to 6.98% and then dipped slightly. On Monday and on Tuesday, the benchmark rate ticked higher. The average of 7.02% was maintained for the second consecutive day on Thursday.
Rates sunk to a two-year low of 5.89% back in September, but they've soared by more than a percentage point over the past three months.
In the past, rates for 30-year mortgages have remained well below the April record of 7.37 percent. And they're nearly a percentage point cheaper than the historic 23-year peak of 8.01% reached in October 2023.
On Thursday, rates for 15-year mortgages increased 5 basis point. The average rate of 6.25% has reached its highest level since July. In September, the 15-year rate also fell to its lowest level in two years, dipping as low as 4.97%. Though today's 15-year average is elevated, it remains significantly below last fall's historic 7.08% reading—a high since 2000.
Jumbo 30-year loan rates held steady at 6.94% after an increase of 7 basis point the previous day. The average jumbo 30-year rate had fallen to 6.24% in September. This was the lowest it’s been for 19 months. Although daily historical jumbo rates weren't published before 2009, it's estimated that the 8.14% peak we saw in October 2023 was the most expensive jumbo 30-year average in 20-plus years.
| National Averages of Lenders' Best Rates – New Purchase | ||
|---|---|---|
| Loan Type | Buy New Rates | Weekly Change |
| The 30-Year Fixed | 7.02% | No Change |
| FHA Fixed 30-Year Rate | 6.28% | No Change |
| VA Fixed Rate 30-Year | 6.54% | +0.01 |
| The 20-Year Fixed Rate | 6.98% | -0.01 |
| 15-Year Fixed | 6.25% | +0.05 |
| FHA 15 Year Fixed | 6.40% | No Change |
| Ten-Year Fixed | 6.31% | +0.15 |
| 7/6 ARM | 7.32% | +0.08 |
| 5/6 AR | 7.44% | +0.01 |
| Jumbo 30-Year Fixed | 6.94% | No Change |
| Jumbo 15-Year Fixed | 6.83% | +0.09 |
| Jumbo 7/6 ARM | 7.12% | -0.05 |
| Jumbo 5/6 ARM | 7.16% | No Change |
| Zillow Mortgage API is available. | ||
The Weekly Freddie Mac Average
Freddie Mac is a government sponsored buyer of mortgages. Every Thursday they publish a weekly mortgage rate average for 30-years. Thursday's reading jumped 13 basis points to a weekly average of 6.85%, following last week's 12 basis point hike. The average was as low as 6.08% as recently as September 26. Back in October 2023, however, Freddie Mac's average saw a historic rise, surging to a 23-year peak of 7.79%.
Freddie Mac's average differs from what we report for 30-year rates because Freddie Mac calculates a weekly average that blends five previous days of rates. Investopedia’s 30-year average, on the other hand, is a reading taken daily, which provides a better and more timely indication of rates. In addition, the criteria for included loans (e.g., amount of down payment, credit score, inclusion of discount points) varies between Freddie Mac's methodology and our own.
Calculate the monthly payment for various loan scenarios using our Mortgage Calculator.
The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. Your rate will depend on your income and credit rating, as well as other factors.
Why do mortgage rates rise or fall?
Rates of mortgages are determined by macroeconomic and industrial factors such as
- Bond market direction and level, in particular 10-year Treasury yields
- Federal Reserve’s current policy on monetary affairs, including bond purchasing and government-backed loans.
- There is fierce competition between lenders of mortgages and loan types.
Because any number of these can cause fluctuations simultaneously, it's generally difficult to attribute the change to any one factor.
For most of 2021, macroeconomic factors have kept mortgage rates relatively low. The Federal Reserve bought billions in bonds to respond to economic pressures caused by the pandemic. Mortgage rates are heavily influenced by this bond-buying strategy.
Starting in November 20, the Fed started to reduce its monthly bond purchases, reducing them by a significant amount each month.
Fed increased federal funds rates aggressively from July 20, 2023 onwards to battle inflation. Although the Fed Funds Rate can affect mortgage rates indirectly, it does so indirectly. The fed funds rate can actually move the opposite direction of mortgage rates.
But given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.
Fed held the Federal Funds Rate at its highest level, starting July 2023. On Sept. 18, however, the Fed announced its first cut in interest rates of 0.50 percent points. This was followed by a quarter-point decrease on Nov. 7, and December 18.
However, the Fed's policy committee cautioned at its meeting last week that, due to stubborn inflation, further rate cuts may be fewer and farther between. The Fed’s revised forecast of 2025 rate cuts pushed the yields on 10-year Treasury bonds higher. This in turn led to a rise in mortgage rates.
What We Do to Track Mortgage Rates
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. Rates are based upon the qualifications of the borrower and may be different from those advertised in teaser offers. © Zillow, Inc., 2024. The Zillow terms of use apply.
Article Sources Investopedia asks writers to use primary resources to back up their writing. This includes white papers, official government data, reporting original and interviews conducted with industry experts. Where appropriate, we also refer to original research by other respected publishers. Learn more about how we produce accurate, unbiased material in our The editorial Policy.
Freddie Mac. “Mortgage Rates."
Congressional Research Service. "Federal Reserve: Tapering of Asset Purchases," Page 1.
Department of The Treasury of The United States. "Daily Treasury Par Yield Curve Rates."
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