The 30-year mortgage rate dropped for the second consecutive day on Monday. After surging to its highest level since July last week, it now averages 6.93%. The majority of other types of loans also lost basis points.
| National Averages of Lenders' Best Mortgage Rates | |
|---|---|
| Loan Type | New Purchase |
| The 30-Year Fixed | 6.93% |
| FHA 30 Year Fixed | 6.28% |
| 15-Year Fixed | 6.18% |
| Jumbo 30-Year Fixed | 6.86% |
| 5/6 ARM | 7.37% |
| Zillow Mortgage API provides access to the Zillow Mortgage API | |
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 31, 2024
Today's New Purchase Mortgage Rate Averages
The Federal Reserve’s December 18 forecast for a scaled-back rate cut in 2025 triggered a surge of mortgage rates to 7.02 percent last week. On Friday the benchmark average fell to 6.99% and on Monday, it was further reduced. The average 30-year rate is now 6.93%.
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 a high in April 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.
The average rate for 15-year mortgages dropped 8 basis points on Monday, to 6.18%. Rates on 15-year mortgages fell in September to a 2-year low, falling as far as 4,97%. Though today's 15-year average is elevated, it remains significantly below October 2023's historic 7.08% reading—a high since 2000.
Jumbo 30-year rates dropped 6 basis points on Monday to a new, average rate of 6.86%. The jumbo 30-year rate average dropped to 6.24% in September. This was the lowest it had 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 | Everyday Change |
| The 30-Year Fixed | 6.93% | -0.06 |
| FHA 30 Year Fixed | 6.28% | No Change |
| VA Fixed 30-Year | 6.45% | -0.09 |
| The 20-Year Fixed Rate | 6.84% | -0.09 |
| 15-Year Fixed | 6.18% | -0.08 |
| FHA 15 Year Fixed | 6.40% | No Change |
| Ten-Year Fixed | 6.17% | -0.14 |
| 7/6 ARM | 7.30% | -0.02 |
| 5/6 ARM | 7.37% | -0.05 |
| Jumbo 30-Year Fixed | 6.86% | -0.06 |
| Jumbo 15-Year Fixed | 6.80% | -0.01 |
| Jumbo 7/6 ARM | 6.98% | -0.22 |
| Jumbo 5/6 ARM | 7.13% | -0.03 |
| Zillow Mortgage API provides access to the Zillow Mortgage API | ||
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-year mortgages. Last week's reading jumped 13 basis points to a weekly average of 6.85%, following the previous week's 12 basis point hike. In fact, the reading had fallen as low as 6.8% on Sept. 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 your monthly mortgage payments using the 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. Rates will vary depending on your credit history, income, etc.
What causes mortgage rates to rise or fall?
The mortgage rate is determined by the complex interplay of macroeconomic factors and industry-specific variables, including:
- Bond market direction and level, focusing on the 10-year Treasury yields
- Current monetary policies of the Federal Reserve, particularly in relation to government bond purchases and mortgage funding.
- 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 kept mortgage rates 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.
The Fed will begin to taper its purchases of bonds in November 2021. Each month, it will make significant reductions until the net is zero by March 2022.
The Fed raised its federal funds rate aggressively between July 2020 and 2023 to combat inflation that has been high for decades. The fed funds rate does not directly affect mortgage rates. Mortgage rates and the Fed funds rate may even move in opposite directions.
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. The central bank cut the rate by 0.50 percentage point on September 18, and followed it up with a quarter-point drop on November 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.
The Mortgage Rate Tracker
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. These rates are what you can expect to receive from lenders when they give quotes based on your qualifications. They may differ from teaser rate advertisements. © Zillow, Inc., 2024. The Zillow terms of use apply.
Article sources Investopedia expects its writers to use original research to support their articles. White papers, data from the government, interviews with experts, and original reporting are all examples. Where appropriate, we also refer to original research by other respected publishers. Our website contains more information about our standards for producing unbiased, accurate content. 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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