Mortgage Interest Rates Today, January 27, 2024 | Rates Inch Back Down (2024)

Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

Mortgage rates ticked up a bit mid-week, but they're back down today. Average 30-year mortgage rates are still a little higher than they were at the start of this month, but overall they're lower than they were in December.

And they could drop down further soon. Most major forecasts expect mortgage rates to go down in 2024 as inflation continues to slow and the Federal Reserve starts lowering the federal funds rate.

In December, the core personal consumption expenditures price index (which excludes food and energy prices) rose 2.9% year over year, the Bureau of Economic Analysis reported on Friday. This is the first time this index has dropped below 3% since 2021.

The core PCE price index is the Fed's preferred measure of inflation. Inflation is likely to continue slowing this year, but Fed officials may want to see things cool off a bit more before they start cutting rates. This means it's possible we'll have to wait until later in the year for mortgage rates to come down substantially.

Ultimately, the Fed wants to see inflation reach an annual rate of just 2%.

Right now, investors are expecting that the Fed will keep rates steady at its next two meetings in January and March, according to the CME FedWatch Tool. But we might see a 25-point cut in May, which could allow mortgage rates to trend down a bit right as the peak homebuying season heats up.

But those who are looking for the lowest rates may need to wait until later this year or until next year's buying season.

Current Mortgage Rates

Current Refinance Rates

Mortgage Calculator

Use ourfree mortgage calculatorto see how today's mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you'll also understand how much you'll pay over the entire length of your mortgage.

Click "More details" for tips on how to save money on your mortgage in the long run.

30-year Fixed Mortgage Rates

The average 30-year fixed mortgage rate was 6.69% this week, according to Freddie Mac. This is a nine-basis-point increase from the previous week.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms or adjustable rates.

15-year Fixed Mortgage Rates

This week, average 15-year mortgage rates were 5.96%, a 20-basis-point increase from the previous week, according to Freddie Mac data.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.

When Will Mortgage Rates Go Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Rates also increased dramatically last year, though they've been trending back down in recent months.

As inflation comes down, mortgage rates will recede as well. Most major forecasts expect rates to trend down throughout 2024.

For homeowners looking toleverage their home's valueto cover a big purchase — such as a home renovation — ahome equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you'd do with a cash-out refinance.

Current HELOC ratesare relatively low compared to other loan options, including credit cards and personal loans.

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve increased the federal funds rate a lot last year to try to slow economic growth and get inflation under control. Inflation has come down a lot in response to this, though it's still a little bit above the Fed's target rate of 2%.

Mortgage rates aren't directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.

Fed hikes have pushed mortgage rates up over the last two years. But the Fed has indicated that it's likely done hiking rates and could start cutting in 2024. Once the Fed cuts rates, mortgage rates should fall even further.