Mortgage interest rates for July 17, 2023: rates are falling (2023)

Some closely monitored mortgage rates have fallen over the past seven days. Mortgage rates for 15-year fixed and 30-year fixed mortgages fell. For variable rates, the 5/1 adjustable rate mortgage also fell lower.

After raising interest rates 10 times since March 2022, the Federal Reserve slammed on the brakes at its June meeting. The central bank's benchmark federal funds rate will remain between 5.00% and 5.25% for now, although the Fed does not rule out further increases if inflation does not decrease further.

As long as inflation continues to fall, experts say a pause in Fed rate hikes could bring some stability to the current volatile mortgage rate market.

Current mortgage interest July 2023

Mortgage rates change every day. Experts recommend shopping around to make sure you get the lowest price. By entering your details below, you can receive a customized quote from one of CNET's lenders.

About these prices:Like CNET, Bankrate is owned by Red Ventures. This tool contains lender partner rates that you can use when comparing multiple mortgage rates.

Mortgages hit a 20-year high at the end of 2022, but now the macroeconomic environment is changing again. Rates fell significantly in January and then rose again in February. Apart from a short peak at the end of May, rates continue to fluctuate between 6% and 7%.

Although the Fed has stopped raising interest rates, mortgage rates will continue to fluctuate on a daily basis. That's because mortgage rates aren't tied to the rate of federal funds in the same way other products, such as home loans and home equity lines of credit, or HELOCs, are. Mortgage rates depend on a range of economic factors, including inflation, employment and the broader outlook for the economy.

“Mortgage rates will continue to fall week after week, but ultimately I think rates will stay in the 6% to 7% range that we are seeing now,” he said.Jacob's channel, Senior Economist at LendingTree Loan Markets. "I don't expect it to rise or even show a sustained uptick after this meeting," Channel said.

Overall, inflation remains high, but has slowly but steadily declined every month since its peak in June 2022.

After a drastic rate hike in 2022, the Fed opted for smaller hikes of 25 basis points during its first three meetings in 2023. The decision to hold rates steady on June 14 suggests that inflation is cooling down and sustained rate hikes may no longer be necessary to bring inflation back to the Fed's target of 2%. The central bank is unlikely to cut rates any time soon, but positive signals from the Fed and cooling inflation could ease some of the upward pressure on mortgage rates.

"Rates are approaching the point of becoming stable. So it's more a matter of how long it takes for rates to start to fall and when inflation returns to where your dollar is going to buy a little more each month," said Kevin Williams, founder of Full Life Financial Planning.

However, mortgage interest rates are still well above the level of a year ago. Fewer buyers are willing to jump into the housing market, reducing demand and driving home prices down in some regions, but that's only part of home affordability.

“Interest rates were much higher in the past and people bought houses and financed houses at those rates. But it was difficult for people to react to such a rapid increase in a short period of time,” he said.Daniel Oney, director of research at the Texas Real Estate Research Center at Texas A&M University. “Everyone had a goal of how much to save to get into the real estate market, but as interest rates rose, those goals shifted as well,” he added.

What does this mean for homebuyers this year? Mortgage rates are likely to fall slightly in 2023, although they are very unlikely to return to the lows of 2020 and 2021. However, interest rate volatility may persist for some time. “Expect mortgage rates to rise and fall in the first half of the year, at least until a consensus is reached on when the Fed will finalize a rate hike,” said Greg McBride, CFA and chief financial analyst at Bankrate. McBride expects interest rates to fall more consistently over the course of the year. “Thirty-year fixed mortgage rates will end the year in the neighborhood of 5.25%,” he predicts.

Instead of worrying about market mortgage rates, buyers should focus on what is in their control: getting the best rate for their situation.

"The most important thing is that they find the right house. The second most important thing, of course, is to find the most efficient means of financing," he said.Melissa Cohn, regional vice president of William Raveis Mortgage.

Take steps to improve your credit score and save for a down payment to increase your chances of qualifying for the lowest rate available. Also, be sure to compare rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, shows you the total cost of borrowing and allows you to compare apples to apples.

30 year fixed rate mortgages

The average 30-year mortgage rate is 7.18%, 20 basis points lower than a week ago. (One basis point equals 0.01%.) A 30-year fixed-term mortgage is the most commonly used loan term. A 30-year fixed-rate mortgage usually has a lower monthly payment than a 15-year mortgage, but usually has a higher interest rate. You can pay off your house less quickly and you pay more interest in the long term, but a mortgage with a fixed term of 30 years is a good option if you want to keep the monthly costs to a minimum.

15 year fixed rate mortgages

The average rate for a 15-year fixed-term mortgage is 6.51%, 9 basis points lower than seven days ago. With a mortgage with a term of 15 years, you certainly have a higher monthly amount than with a mortgage with a term of 30 years, even if the interest and the loan amount are equal. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. This usually includes the ability to get a lower interest rate, pay off the mortgage earlier, and pay less overall interest in the long run.

Variable rate mortgages 5/1

The 5/1 adjustable rate mortgage has an average interest rate of 6.19%, 4 basis points lower than seven days ago. With a variable rate mortgage, you usually get a lower interest rate for the first five years than a fixed-term mortgage of 30 years. However, because the rate moves with the market rate, you may end up paying more after that time, as outlined in the terms of your loan. Therefore, a variable rate mortgage can be a good option if you plan to sell or refinance your home before interest rates change. But if not, you could get a significantly higher interest rate if market rates change.

Trends in mortgage interest deduction

Mortgage rates were historically low for much of 2020 and 2021, but have risen steadily in 2022. Now mortgage rates are about double what they were a year ago, fueled by persistently high inflation. That high inflation has prompted the Fed to raise its target federal funds rate seven times by 2022. By raising interest rates, the Fed makes money more expensive and makes it more attractive to hold savings, suppressing demand for goods and services.

Mortgage interest rates do not move with the actions of the Fed in the same way that, say, mortgage rates do. But they respond to inflation. As a result, weaker inflation data and positive signals from the Fed will influence mortgage rate movements more than the last 25 basis point rate hike.

We use data collected by Bankrate to track exchange rate changes over time. This table summarizes the average rates offered by lenders in the US:

Average interest rates on mortgage loans

Prices from July 17, 2023.

How to find personalized mortgage rates

Talk to your local mortgage broker or use an online mortgage service to find a custom mortgage rate. When considering mortgage rates, think about your goals and current financial situation.

Specific interest rates vary based on factors such as creditworthiness, down payment, debt-to-income ratio, and loan-to-value ratio. In general, you want a higher credit score, higher down payment, lower DTI and lower LTV to get a lower interest rate.

In addition to your mortgage interest, factors such as closing costs, commissions, discount points and taxes can also influence the price of your home. Compare stores with multiple lenders -- such as credit unions and online lenders in addition to local and state banks -- to get the loan that's best for you.

What is a good loan term?

When choosing a mortgage, do not forget to consider the term of the loan or the payment schedule. The most common mortgage terms are 15 years and 30 years, although there are also mortgages for 10, 20 and 40 years. Mortgages are further divided into fixed and variable rate mortgages. For fixed rate mortgages, the interest rates are the same throughout the life of the loan. For floating rate mortgages, interest rates are fixed for a certain number of years (usually five, seven or 10 years), after which the interest rate changes each year based on the current market interest rate.

When choosing between a fixed and variable rate mortgage, you need to consider the length of time you plan to live in your home. Fixed rate mortgages may be better suited for those who plan to stay at home for a while. While floating rate mortgages can offer lower interest rates up front, fixed rate mortgages are more stable over the long term. However, if you don't plan on keeping your new home for more than three to 10 years, a variable rate mortgage could get you a better deal. The best loan term depends on your situation and goals, so when choosing a mortgage, think carefully about what you think is important.