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Daily mortgage rates for August 12, 2024: Average rates open week down as market awaits key inflation data

Kelly Suzan Waggoner
Daily mortgage rates for Monday, August 12, 2024 (BrianAJackson via Getty Images)

Average mortgage rates open the week lower, with 30-year fixed terms hovering around 6.50% as of Monday, August 12, 2024, as the market awaits key inflation and consumer spending data for July, starting with the release of the Producer Price Index tomorrow and followed by the Consumer Price Index on Wednesday. Fresh data within these reports will provide insights into the health of the economy after last week's market volatility, likely strengthening the case for a September Fed rate cut.

The current average rate for a 30-year fixed mortgage is 6.51% for purchase and 6.52% for refinance — down 24 basis points from 6.75% for purchase and 24 basis points from 6.76% for refinance last Monday. Rates on a 15-year mortgage stand at an average 5.91% for purchase and 5.94% for refinance, down 28 basis points from 6.19% for purchase and 29 basis points from 6.23% for refinance opening last week. The average rate on a 30-year fixed jumbo mortgage is 6.70%.

Purchase rates for Monday, August 12, 2024

  • 30-year fixed rate — 6.51%

  • 20-year fixed rate — 6.31%

  • 15-year fixed rate — 5.91%

  • 10-year fixed rate — 5.89%

  • 5/1 adjustable rate mortgage — 6.14%

  • 30-year fixed FHA rate — 6.65%

  • 30-year fixed VA rate — 6.83%

  • 30-year fixed jumbo rate — 6.70%

Refinance rates for Monday, August 12, 2024

  • 30-year fixed rate — 6.52%

  • 20-year fixed rate — 6.35%

  • 15-year fixed rate — 5.94%

  • 10-year fixed rate — 5.97%

  • 5/1 adjustable rate mortgage — 6.06%

  • 30-year fixed FHA rate — 6.77%

  • 30-year fixed VA rate — 7.36%

  • 30-year fixed jumbo rate — 6.67%

Source: Bankrate lender survey

Freddie Mac weekly mortgage report: Mortgage rates decrease to lowest levels in over a year

Freddie Mac reports an average 6.47% for a 30-year fixed-rate mortgage, down 26 basis points from last week's average 6.73%, according to its weekly Prime Mortgage Market Survey of nationwide lenders published on August 8, 2024. The fixed rate for a 15-year mortgage is 5.63%, down 36 basis points from last week's average 5.99%. These figures are lower than a year ago, when rates averaged 6.96% for a 30-year term and 6.34% for a 15-year term.

“Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing," says Sam Khater, Freddie Mac’s chief economist, of the latest data. “The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move. Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance, with the refinance share of market mortgage applications reaching nearly 42 percent, the highest since March 2022.”

Freddie Mac updates its Prime Mortgage Market Survey data weekly on Thursdays at noon ET.

Mortgage rates are determined by many factors that include inflation rates, economic conditions, housing market trends and the Federal Reserve's target interest rate. Lenders also consider your personal credit score, the amount available for your down payment, the property you're interested in and other terms of the loan you're requesting, like 30-year or 15-year offers.

Because mortgage rates can fluctuate daily, it's best to lock in a rate when you're comfortable with the overall conditions of your mortgage or home loan.

Mortgage lenders keep a close eye on the benchmark federal funds target interest rate set by the Federal Reserve, the U.S.'s central bank. Called the Fed rate, it's the benchmark that affects rates on deposit accounts, loans and other financial products. Typically, as the fed rate rises, so do APYs on savings products like CDs, high-yield savings accounts, money market accounts and home equity loans. Mortgage rates don't follow the Fed rate as closely, but they do reflect the same elements the Fed evaluates when making decisions on the benchmark — especially inflation — which means as the Fed rate increases, mortgage rates also tend to rise.

The Federal Reserve increased the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic.

July 31, 2024: Fed holds benchmark rate unchanged for eighth — and likely final — time

At the conclusion of its fifth rate-setting policy meeting of 2024 on July 31, the Federal Reserve left the federal funds target interest rate at a 23-year high of 5.25% to 5.50% for an eighth straight time since July 2023.

In its post-meeting statement, the Federal Reserve said "risks to achieving its employment and inflation goals continue to move into better balance,” acknowledging “there has been modest further progress toward the Committee's 2 percent inflation objective,” but reiterated from its June statement that its rate-setting committee "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."

Economists estimate at least one rate cut this year — from 25 to 50 basis points — with an additional four cuts anticipated in 2025.

It's too early to predict what the Federal Reserve will decide at its next policy meeting on September 17 and September 18, 2024, though many experts expect the Fed will announce the first of anticipated cuts to the federal funds rate — its first rate cut in four years. The CME FedWatch Tool, which measures market expectations for Fed fund rate changes, projects a 51.5% chance the Fed will cut rates to a range of 5.00% to 5.25%, with a 48.5% chance that the Fed will cut rates to a range of 4.75% to 5.00%.

Signs of cooling inflation have bolstered a September cut prediction, with economic data indicating a continued decline from a peak of 9.1% in June 2022 to rates that have ranged from 3% and 4% since May 2023. The consumer price index released on July 11 revealed consumer prices rose 3% year over year in June, down from 3.3% in May, slowing more than expected. Producer price index data released on July 12, however, reported a sharper increase in wholesale prices — or the prices manufacturers pay to producers of goods and services — than forecast for June. The index increased 2.6% for the 12 months ending in June, the largest year-over-year gain since March 2023, which likely influenced an already cautious Fed to skip cutting the rate in July. July's Producer Price Index data is due for release this week on August 13, followed by new Consumer Price Index data on August 14.

Introducing concern is the latest jobs report released August 2, which revealed softer job growth and a higher unemployment rate than expected. Employers added 114,000 new jobs in July, far lower than the 206,000 jobs added in June, and the jobless rate rose for a fourth consecutive month to 4.3% — its highest since October 2021 and stoking fears the Fed might have waited too long to lower rates.

At a post-meeting press conference on July 31, Federal Reserve Chair Jerome Powell said that a September rate cut is “on the table,” but that the central bank "has made no decisions about future meetings.”

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on September 18, 2024, at 2 p.m. ET.

Dig deeper: When’s the next Federal Reserve meeting? The FOMC — and how it affects your finances

The difference of even half a percentage point on your interest rate can save you hundreds of dollars a month and thousands of dollars over the life of your mortgage, but the mortgage rate you're ultimately offered depends on the mortgage you're interested in, payments you're willing to pay up front and your overall financial health.

  • Your credit score. Knowing your credit score can help you shop around for lenders you're likely to get approval through, as well as understand the type of mortgage for your lifestyle and income. The best mortgage rates go to borrowers with good to excellent credit — typically a FICO credit score of at least 670 — though even with fair credit, you may be able to find a mortgage offering decent rates.

  • Your down payment. The more money you can put down toward your home, the better it benefits your interest rate. Paying at least 20% of your home's purchase price up front generally results in a lower interest rate — and you can avoid mortgage insurance, which increases your total cost.

  • Your loan term. While the 30-year mortgage remains a popular way for Americans to purchase homes, you can find terms of 20 years, 15 years and 10 years. Shorter loan terms usually come with lower interest rates, though with higher monthly payments. Longer mortgage terms can result in smaller monthly payments, though you'll pay higher total interest over the life of your loan.

  • Interest rate type. Mortgage rates come with two basic types of rates — fixed and variable. Fixed-rate mortgages offer a consistent interest rate over the life of your loan, whereas adjustable-rate mortgages (ARMs) often start with a lower fixed rate for an agreed-on time and then adjust to a variable rate based on market conditions for the remainder of your term. Choosing between these two rates depends on your financial goals and tolerance for risk.

Lenders are financial institutions that loan money to homebuyers. A lender is different from a loan servicer, which typically handles the operational tasks of your loan, like processing payments, talking directly with borrowers and sending monthly statements.

Refinancing is a process of trading in your current mortgage to another lender for lower rates and better terms than your current loan. With a refinance, the new lender pays off your old mortgage and you then pay your monthly statements from the new lender.

An adjustable-rate mortgage — commonly called an ARM — is a type of home loan with a variable rate. Unlike a fixed-rate mortgage, which locks in an interest rate and predictable payments that apply over the full loan term, an ARM starts at an initial fixed rate for a period of three years or longer, after which it adjusts to a higher rate and then further adjusts periodically over the remaining life of the loan.

For a 5/1 adjustable-rate mortgage, the first number indicates the number of years at the fixed rate — or five years — and the second number indicates the rate at which the mortgage rate readjusts after — in this case, each year or annually.

Mortgage rates are influenced by complicated factors like inflation, employment rates, the bond market and the overall economy. While the Federal Reserve doesn't set mortgage rates, this central bank of the U.S. sets benchmark rates that indirectly affect rates on financial products like mortgages, personal loans and deposit accounts.

March inflation data came in higher than expectations, which is among the main concerns driving mortgage rates higher in April.

It's not likely — lenders consider the market conditions and other financial factors when determining rates. You can, however, ask about how you can reduce costs in other ways when comparing mortgage lenders. For instance, many lenders offer lower rates in exchange for "mortgage points" — upfront fees you pay to your lender. A mortgage point could cost 1% of your mortgage amount, which means about $5,000 on a $500,000 home loan, with each point lowering your interest rate by about 0.25%, depending on your lender and loan.

Yes. If it’s cash you’re after to pay for home renovations, pay off high-interest credit card debt or cover an emergency, tapping into your home’s value is a way to unlock lower rates without refinancing — and without losing your low-rate mortgage. You typically need good to excellent credit and to have built enough equity in your home. Learn how to get equity out of your home while rates are high.

Editor's note: Rates shown are as of Monday, August 12, 2024, at 6 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.

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