Mortgage Rates Today

June 25th, 2024

Interest rate

What are mortgage rates today?  Interest rates are different according to numerous variables. Interest rates can be different based on loan size, credit score, property type, loan type, how many days you need to lock-in the interest rate for, and more.

I am not going to talk about exact rates which are impossible to quote online, due to the variability of each of our own individual circumstances. But I am going to talk about some other important things related to mortgage interest rates.

Date the Rate and Marry the House

You have probably heard the phrase, “date the rate and marry the house”. This has become a marketing slogan for many realtors. It means focus on choosing the right house and neighborhood for you and don’t focus on the mortgage rates. Interest rates are so volatile you’ll likely refinance at some point anyway. So don’t focus on the interest rate, focus on the house.

That may only seem like a slick marketing slogan. But it is correct. You’ll see later in this blog the ups and downs of interest rates. That volatility helps deliver the possibility of a future refinance. If you can qualify for a mortgage today, and you feel you can handle the monthly payment, then buy the house. The interest rate may only be temporary.

Refinancing

When I close a loan for a homebuyer, I setup an automated refinance search in our system. The system looks twice daily for the refinance rate I tell it to. I discuss with the homeowner after they buy their house what the benchmark interest rate is that they’d like to see to trigger a refinance. We calculate the interest rate they’d need to see sufficient savings to justify the refinance closing costs.

Recapture Period

If you’re going to spend $5,000 in closing costs, for example, we need to determine the recapture period. Do you want to save $500 a month to justify spending $5,000 in closing costs, which yields a 10 month recapture period? Or would you refinance for only $250 a month in savings, which yields a 20 month recapture period?

Are There Really “No Closing Cost” Refi’s?

Regardless of your answer, it’s important to remember about the very real possibility of refinancing. It’s also important to focus on the history of interest rates. This will help tell you more about the volatility of interest rates. It will also tell you where interest rates are today, compared to the history of interest rates. All this information will help inform you on your chances of refinancing.

Bond market report

The 10 Year Treasury Bond is not an exact correlation to mortgage rates. But watching the 10 year treasury bond does give you an idea of the direction of mortgage rates. It is good to know this historical information.

The 10 Year Treasury Bond is around 4.2% as of today.

One month ago the 10 Year Treasury Bond was 4.4%.

Three months ago the 10 Year Treasury Bond was 4.2%.

July 2023 the 10 Year Treasury Bond was 4.0%.

Recent data

As you can see interest rates really have not done much of anything for almost the last one year. Below are more interesting historical numbers.

In 2021 it averaged around 1.5%.

In 2020 it was under 1%.

Historical data

It sounds like rates are incredibly high right now, correct? Not really. Not according to history when you keep going back more than just a few years.*

2018: the average yield of the 10 Year Treasury Bond was 2.91%.

2017: the average yield of the 10 Year Treasury Bond was 2.33%.

2007: the average yield of the 10 Year Treasury Bond was 4.63%.

1997: the average yield of the 10 Year Treasury Bond was 6.35%.

1987: the average yield of the 10 Year Treasury Bond was 7.18%.

1977: the average yield of the 10 Year Treasury Bond was 7.42%.

You can take an even deeper dive into the history of interest rates by looking at this blog and its data and video.

*The source for these numbers comes from: https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart

Conclusion

Do you still have questions about mortgage rates? Contact me to discuss your questions. Click here to schedule a call, or you can email me directly. You can also get a more exact rate quote according to your specific scenario by clicking here.

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Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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