Rates uptick at 6.625%
Updated: Oct 21st, 2024
Current interest rate forecast
Mortgage rates continued to increase this week as all significant economic data releases for the week pointed to a stronger economy. Core Retail Sales and Jobless Claims both came in more favorably than expected and the market yet again repriced down the probability of future interest rate decreases.
Check out today’s rates here
Will interest rates go up or down this week?
Looking ahead, Thursday’s Services and Manufacturing PMI could push rates higher if they signal expansion (readings above 50). Similarly, while Weekly Jobless Claims are forecasted at 243,000, a lower-than-expected number would reinforce the trend of rising rates. Overall, the outlook suggests continued upward pressure on mortgage rates.
How will rate changes impact homebuyers?
The recent drop in mortgage rates—from a high of 7.875% to today’s 6.5%—will save the typical homebuyer $253 per month and $135,000 over the course of a 30-year loan. Another way to look at it: a typical buyer can now spend nearly 15% more on a home, or roughly $40,000, and still maintain the same monthly payment. So, while rates have risen from where they were at the end of September, buyers are still seeing much higher savings compared to recent months.
Calculations based on a $400k home price with an 8% down payment, and a 740 credit score
Current mortgage rates
You can see personalized rates on our current mortgage rates page (we promise they are real rates for real people).
| Product | Rate- Oct. 21 | Rate- Oct. 14 | Change |
|---|---|---|---|
| 30 Year Fixed | 6.625% | 6.5% | 0.125% increase |
| 30 Year Fixed – VA | 6.125% | 6.0% | 0.125% increase |
| 30 Year Fixed – FHA | 5.875% | 5.75% | 0.125% increase |
| 30 Year 7/6 ARM | 7.75% | 7.50% | 0.25% increase |
| 15 Year Fixed | 6.25% | 5.875% | 0.25% increase |
What might cause rates to increase or decrease this week?
Services/Manufacturing PMI (Thursday – 8:30am) Two purchasing managers indices that reflect economic activity experienced by services and manufacturing firms, respectively. Readings above 50 signify an expansion and could push mortgage rates up. Readings below 50 signify a contraction and may cause rates to drop.
Weekly Jobless Claims (Thursday – 8:30am) Employment data is more significant in moving the future path of interest rates than employment data in this stage of the macroeconomic cycle, and this report has taken on additional significance. 243,000 forecast, and a higher than expected jobless claims number may push down mortgage rates.
Mortgage rate predictions?
At the beginning of the year, we predicted a macro shift to lower rates sometime in the summer and four 25-bps rate cuts for 2024. That macro shift occurred in August, when the BLS published a far weaker than expected Labor Market Report pushing our rates for a 30yr mortgage down as far as 6%. The market got ahead of itself projecting Fed rate cuts, again, and at the close of Q3 our 30yr benchmark is right on our prediction of 6.5%. Expect a gradual decline to the end of the year.
| Quarter | Prediction | Actual |
|---|---|---|
| Q1 2024 | 6.875% | 6.875% |
| Q2 2024 | 6.625% | 7.0% |
| Q3 2024 | 6.5% | 6.5% |
| Q4 2024 | 6.5% |
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One response to “2024 mortgage interest rate forecast”
Thanks Kyle,
Always such great informative information.