Current Mortgage Rates, Rates Trending Upwards.

Nearly two years have gone by with record-low mortgage rates. Now, 2022 has started off with rates rising higher than pre-pandemic levels.

Don’t cancel your home purchase plans just yet. Even though rates are higher than they were in 2021 they are still considered “normal” from a historical perspective. It was only a few short years ago where the 30-year fixed rates were in the high 5%’s.

Homebuying decisions take a lot more consideration outside of the interest rate anyway. Buying a home is about making a lifestyle choice. What’s going on in the interest rate market can influence a decision, it’s wise to not base it solely on a few basis points on a mortgage rate. Setting and sticking to a realistic homebuying budget is way more important than what rate you get.

Let’s take a look at current mortgage rates, where rates have been in the past, and what it all means for the borrower.

Looking at today’s mortgage rates a variety of rates climbed. The averages for both 30-year fixed and 15-year fixed mortgages both climbed higher. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) also were raised.

Take a look at today’s rates:

• 30-year fixed mortgage rates are averaging 5.84%

• 20-year mortgage rate: 5.79%

• Today’s 15-year fixed mortgage rate is 5.00%

• 10-year mortgage rate: 5.00%

• 5/1 ARM rates are averaging 4.26%

Mortgage Rate Trends: What’s Behind the Recent Rate Movement?

Mortgage rates have increased because of a variety of economic factors so far this year. Persistently high inflation is a big one, Jacob Channel, senior economic analyst at LendingTree told us. May’s inflation report shows 8.6% inflation, the highest level in 40 years. To combat this inflation, the Federal Reserve increased its benchmark short-term interest rate. Since inflation remained higher than expected, the Fed raised rates by 50 basis points in May and by 75 basis points in June.

Following the inflation report, mortgage rates spiked ahead of the Fed’s announcement. “I think what we’re seeing is that lenders had already anticipated that the Fed was going to raise the Fed funds rate by 75 basis points and they began to preemptively push mortgage rates up,” Jacob Channel, senior economist at LendingTree, told us.

In addition to the COVID lockdown in China and Russia’s invasion of Ukrainian territory, financial markets are still reacting to other global factors. “​​We have a lot of factors like that that are putting upward pressure on mortgage rates,” Channel says. “The volatility has been through the roof,” Shashank Shekhar, founder and CEO of InstaMortgage, told us. “The market has been adjusting to a new news cycle practically every single day.”

What do Today’s Mortgage Rates Mean for Your Home Buying Plans?

Despite the dramatic increases, mortgage rates remain at relatively normal levels and are still considered historically favorable mortgage rates.

Home prices are also on the rise, and as rates increase, that will also contribute to the rising cost of home ownership. Prices are up significantly from before the pandemic, with a combination of limited supply of homes, higher costs to build homes and massive demand from buyers leading to the surge.

It’s also important to remember that while mortgage rates are important, and the difference of a point or so can mean a lot of money over a 30-year mortgage, experts advise against trying to time the market to get the best mortgage rate. Focus on finding the right house, and do it when your personal lifestyle and financial situation indicate it’s the right time.

Be sure to get quotes from different lenders to ensure you’re getting the best deal, experts say. “The rate highly impacts your monthly affordability for as long as you will hold this home,” Skylar Olsen, principal economist at Tomo, a digital real estate and mortgage company, told us. “It is actually a critical piece of this decision, and that takes shopping around.”

Current Mortgage Refinance Rates

Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their mean rates go up. Shorter term, 10-year fixed-rate refinance mortgages also inched up.

The refinance averages for 30-year, 15-year, and 10-year loans are:

• Today’s average 30-year fixed refinance rate is: 5.79%

• 20-year fixed refinance rates are averaging 5.76%

• 15-year refinance rate: 5.01%

• 10-year refinance rate: 4.99%