Are Mortgage Rates Going Down?

current mortgage rates

Current Mortgage Rates


Interest rates improved over the past 7 days and currently mortgage interest rates are sitting at about 3 Month lows. 
The Mortgage Backed Security (MBS) traded up +53 bps over the past 7 days.  
The BLS Jobs Report comes out on Friday, December 8th.  The ADP report came out today and indicates job creations were lower than expected numbers. 
The Jobs report typically has a substantial effect on where mortgage interest rates will go over the month.
The lower than expected Job Growth in November was one of the items that started the trend towards lower mortgage rates.
Let’s hope this one does the same. 
Below is my rate sheet today. 
There are a lot of characteristics that go into a mortgage rate – credit score, investor, loan to value, loan amount, costs, etc. 
Please call me to go over your specific scenario so we can price your loan out accurately.

The rates below all have around 1 Discount Point being charged. 


A big headline came out this week when ING Economics predicted that the FED will lower the Federal Funds Rate 6 times in 2024.
So let’s give some context before we jump in.
During Covid and the period afterwards, the Federal Funds Rate was near 0%.
The FED claimed that inflation was transitory which has proven to be incorrect. 
Inflation numbers went through the roof and the FED started raising the Federal Funds Rate to combat inflation.
The FED raised the Federal Funds Rate 11 times over 16 months from 0% to 5.25% to 5.5%.
This rapid rise caused major disruption in the mortgage, real estate and banking industry. 
The FED has paused any rate hikes over the past 2 meetings while making it very clear that they could
raise the Federal Funds Rate if they feel it’s needed to combat inflation more.
Many experts believe that the U.S. economy is now starting to show the signs that the economy is drastically slowing down.
According to ING’s chief international economist James Knightley, 
"The data suggests stagnant real household incomes over quite some time now. 
So far, this has been offset by the running down of savings and the use of debt to fuel spending growth.
However, tighter credit conditions and high borrowing costs are likely to weigh heavily on the flow of credit to the household sector while there is 
growing evidence of pandemic-era accrued excess savings being exhausted for an increasing number of people.”
Many other industry experts are predicting a similar downturn in the Federal Funds Rate.  The FED futures suggest the FED will lower rates 125 bps next year.  
UBS expects the FED to lower rates by 275 bps next year.
If the FED lowers the Federal Funds Rate like many experts predict, 
My prediction is this:
  1. Although the FED rate doesn’t directly correlate to mortgage interest rates, I expect mortgage interest rates to come down in 2024. 
  2.  The FED rate has a more close association with Home Equity Line of Credit rates (HELOCS).  I expect HELOC rates to drop.
  3. Housing Prices will increase in 2024
    Here is the full article from Business Insider: