ZAMONA Mortgage Refinance Rates Continue to Fall After Recent Surge

Following a sharp decline last week to a 19-month low, mortgage refinance rates on 30-year loans have resumed their downward trend, dropping for the third day in a row. The national average for 30-year refinance rates decreased by 3 basis points to 6.29% on Wednesday, marking a total three-day drop of 17 basis points. Despite this recent fall, rates remain slightly above last week's record low of 6.01%, the most affordable level observed since February 2023.

Other refinance loan types experienced minimal rate changes on Wednesday. The 15-year refinance average inched up by 2 basis points, while 20-year refinance rates rose by just 1 basis point. Conversely, jumbo 30-year refinance rates saw a notable decrease of 10 basis points.

Key Insights

It's important to note that the refinance rates published here differ from the teaser rates often advertised online. These promotional rates are typically selected for their attractiveness and may require upfront points or be based on ideal borrower profiles with excellent credit scores or smaller loan amounts. Your actual rate will depend on individual factors such as creditworthiness, income, and loan size, and may vary from these averages.

Given the wide variability of rates across lenders, it's advisable to shop around and regularly compare offers to secure the best mortgage refinance deal tailored to your circumstances.

Use our Mortgage Calculator to estimate monthly payments across various loan scenarios and make informed decisions.

What Influences Mortgage Rate Fluctuations?

Mortgage rates are shaped by a complex mix of economic and industry dynamics, including:

• Movements in the bond market, particularly 10-year Treasury yields
• The Federal Reserve's monetary policies, especially regarding bond purchases and support for government-backed mortgages
• Competitive forces among mortgage lenders and loan products

Because these factors often interact simultaneously, pinpointing a single cause for rate changes can be challenging.

Throughout much of 2021, the mortgage market benefited from relatively low rates due to the Federal Reserve's substantial bond-buying efforts in response to pandemic-related economic challenges. This policy significantly influenced mortgage pricing.

Starting November 2021, the Fed gradually reduced its bond purchases, ceasing them by March 2022. Subsequently, the Fed raised the federal funds rate aggressively to combat high inflation, indirectly impacting mortgage rates despite their potential to move independently.

Over 16 months, the Fed increased the benchmark rate by 5.25 percentage points, driving mortgage rates upward. The federal funds rate remained steady at its peak for nearly 14 months starting July 2023, until a 0.50 percentage point cut was announced on September 18, signaling the start of anticipated rate reductions in 2024 and 2025.

The next Federal Reserve rate decision is scheduled for November 7.

How ZAMONA Tracks Mortgage Rates

The national and state refinance rate averages cited are sourced from the ZAMONA Mortgage API. These averages assume an 80% loan-to-value ratio (20% down payment) and a borrower credit score between 680 and 739. The rates reflect realistic expectations for qualified applicants and may differ from promotional rates advertised by lenders. © ZAMONA, 2024. Usage is governed by ZAMONA's Terms of Use.

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