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Mortgage rates have been steadily dropping. Last week, the average 30-year fixed mortgage rate reached 6.15%, according to Freddie Mac. This is the lowest this rate has been since September 2022. 

According to its latest analysis, Fannie Mae’s Economic and Strategic Research Group expects housing affordability to improve somewhat this year as home prices recede along with mortgage rates and the still-tight labor market continues to put upward pressure on household incomes.

Today’s mortgage rates
Today’s refinance rates
Mortgage calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:

By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.

Are HELOCs a good idea right now?

Many homeowners gained a lot of equity over the past few years as home prices increased at an unprecedented rate. But because rates are so high now, tapping into that equity can be expensive. 

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may still be a good option. 

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. 

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Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than you would with a home equity loan or a cash-out refinance. Just keep in mind that HELOC rates are variable, so if rates start to trend up further, yours will likely increase, as well.

Mortgage rate projection for 2023

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022.

But many forecasts expect rates to begin to fall this year. In their latest forecast, Fannie Mae researchers predicted that 30-year fixed rates will trend down throughout 2023 and 2024.

But whether mortgage rates will drop in 2023 hinges on if the Federal Reserve can get inflation under control.

In the last 12 months, the Consumer Price Index rose by 6.5%. This is a significant slowdown compared to where inflation was earlier this year, which is a sign that mortgage rates may start coming down soon as well.

If the Fed acts too aggressively and engineers a recession, mortgage rates could fall further than what current forecasts expect. But rates probably won’t drop to the historic lows borrowers enjoyed throughout …read more

Source:: Business Insider

      

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