“Mortgage Rates Rise Over Last Seven Days, Says Senior Economist Jacob Channel”

Mortgage rates have increased over the last week, with 15-year and 30-year fixed mortgage rates both moving up. The Federal Reserve’s recent increase in the federal funds rate is attempting to curtail inflation by making borrowing more expensive. Experts suggest the markets may have already accounted for this in the mortgage rates. It is advised for homebuyers to focus on improving credit scores and saving for a down payment, rather than worrying about mortgage rates. Comparing rates and fees from multiple lenders can also help secure the best deal. Justin Jaffe reported

Changes in Mortgage Rates Over the Past Week

In the past week, the trend in key mortgage rates has been upward. Both the average rates for 15-year fixed and 30-year fixed mortgages experienced an increase. On the other hand, the rate for the 5/1 adjustable-rate mortgage saw a decrease.

Rising Inflation and Mortgage Rates in 2022

There was a surge in inflation in 2022, and this led to a corresponding rise in mortgage rates. The Federal Reserve took steps to control price growth by increasing its federal funds rate. This short term interest rate determines the charges banks impose on each other for loans. The aim of this hike is to curb consumer spending, thus reducing prices.

At the Federal Reserve meeting on July 26, the federal funds rate received an increase of 25 basis points (0.25%), marking the 11th time the current rate hiking cycle has seen an increase. This recent hike could affect mortgage rates, although experts suggest that the market may have already taken it into account.

Current Mortgage Rates as of July 2023

The Federal Reserve has recently raised interest rates, possibly leading to changes in mortgage rates. It’s advisable to shop around for a rate that suits your financial capacity. By providing your details below, you can receive a personalized quote from one of CNET’s partner lenders.

Mortgage Rate Predictions

Jacob Channel, senior economist at LendingTree suggests that while mortgage rates may fluctuate from week to week, they are likely to remain within the 6% to 7% range. Although the Federal Reserve does not directly dictate mortgage rates, it can influence them significantly. Mortgage rates change daily in response to various economic factors, including inflation, employment, and overall economic outlook. Despite the potential for more hikes from the Federal Reserve, a decrease in the inflation rate could be beneficial for mortgage rates.

How to Improve Mortgage Rates

Instead of worrying about fluctuating mortgage rates, homebuyers should focus on securing the best rate for their financial situation. This can be achieved by improving your credit score, saving for a down payment, and comparing rates and fees from multiple lenders.

Details on 30-Year and 15-Year Fixed-Rate Mortgages

The average for a 30-year fixed mortgage is 7.23%, a rise of 3 basis points from a week ago. While 30-year mortgages often have higher interest rates than 15-year mortgages, they usually come with lower monthly payments. On the other hand, a 15-year fixed mortgage carries an average rate of 6.56%, an increase of 7 basis points from the previous week. Although a 15-year loan may have larger monthly payments, it could be a better deal in the long run as it typically comes with a lower interest rate and less total interest paid.

5/1 Adjustable-Rate Mortgages

The average rate for a 5/1 ARM is 6.20%, a decline of 4 basis points from last week. Although the interest rate may increase after the first five years, an adjustable-rate mortgage could be a good choice for borrowers planning to sell or refinance their home before the rate changes.

How to Get Personalized Mortgage Rates

When you’re ready to apply for a loan, you can reach out to a local mortgage broker or search online. Consider your current financial situation and your goals when looking for a mortgage. Factors such as your credit score, down payment, loan-to-value ratio, and debt-to-income ratio can all affect your mortgage rate.

Choosing the Best Loan Term

When selecting a mortgage, the loan term, or payment schedule, is an important consideration. The most common loan terms are 15 years and 30 years, but 10-, 20- and 40-year mortgages are also available. Fixed-rate and adjustable-rate mortgages are two options to consider, with the former offering a stable interest rate for the life of the loan, while the latter offers a lower initial interest rate that may increase after a certain period.

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