Mortgage Rates Climb Again & What It Means

Mortgage rates are on the rise again, making home buying more expensive for many Americans. After briefly dipping in mid-September, rates have climbed for three straight weeks, with the average 30-year fixed mortgage now sitting at 6.54 percent and the 15-year fixed at 5.71 percent. While many hoped that recent Federal Reserve rate cuts would lower borrowing costs, the impact has been minimal. Experts believe the Fed might make small additional cuts, but they likely won’t be enough to significantly reduce mortgage rates.

The higher rates have already made an impact on the housing market. Mortgage applications have dropped by 17 percent, and refinances have declined even more sharply by 26 percent. Fewer buyers are able to afford homes at current rates, and many homeowners are holding off on refinancing because of the high costs.

Looking ahead, industry experts don't expect mortgage rates to come down significantly in 2024. The combination of a strong economy and a steady job market means the Fed isn’t likely to make aggressive rate cuts. This could keep home affordability a challenge for many buyers, making the market less active than in previous years. For those looking to buy, patience and careful financial planning will be key as borrowing costs remain high.