Today’s mortgage, refinance rate: November 1, 2022

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After peaking early last week, 30-year fixed mortgage rates have remained below 7% for the past few days.

Today, the Federal Reserve is meeting to discuss its next big policy move. The CME tool FedWatch currently indicates that there is an 86% chance that the Fed will announce another 75 basis point hike in the federal funds rate on Wednesday. Given that markets have already priced in the likelihood of another big hike, mortgage rates shouldn’t be affected by the Fed’s announcement.

The Fed raised the federal funds rate in an attempt to slow the economy and bring down inflation. So far, that hasn’t had much of an impact, causing many to worry that the central bank will have to keep raising rates until the economy enters a recession.

Today’s Mortgage Rates

Type of mortgage Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Today’s Refinance Rates

Type of mortgage Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

mortgage calculator

Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:

mortgage calculator

$1,161
Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

By clicking on “More details”, you will also see the amount you will pay over the life of your mortgage, including the amount of principal versus interest.

Are HELOCs a good idea right now?

Many homeowners have gained great net worth over the past couple of years as home prices have risen at an unprecedented rate. But since rates are so high today, tapping into that equity can be costly.

For homeowners looking to leverage the value of their home to cover a big purchase, like a home improvement, a home equity line of credit (HELOC) can still be a good option.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similar to a credit card in that you borrow what you need rather than getting the full amount you borrow in one lump sum.

Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than with a home equity loan or cash refinance. Just keep in mind that HELOC rates are variable, so if rates start to increase further, yours will likely increase as well.

Projection of mortgage rates for 2023

Mortgage rates started to recover from historic lows in the second half of 2021 and have risen more than three percentage points so far in 2022. They will likely remain near current levels for the remainder of 2022.

But many forecasts predict that rates will start falling next year. In their latest forecast, Fannie Mae researchers predicted that rates are currently peaking and that 30-year fixed rates will drop to 6.2% by the end of 2023.

The Mortgage Bankers Association also noted that a recession in the first half of 2023 could cause rates to drop even faster. He currently estimates that there is a 50% chance that a mild recession will materialize next year.

The decline in mortgage rates in 2023 depends on the Federal Reserve’s ability to control inflation.

Over the past 12 months, the consumer price index has increased by 8.2%. This is only a slight slowdown from the previous month’s numbers, meaning the Fed will likely need to continue to aggressively raise fed funds rates to bring prices down significantly.

As inflation slows, mortgage rates will likely start to come down as well. If the Fed acts too aggressively and engineer a recession, mortgage rates could fall further than currently forecast. But rates are unlikely to fall to the historic lows that borrowers have enjoyed over the past two years.

When will real estate prices go down?

House prices are starting to drop, but we probably won’t see huge drops, even in a recession.

The S&P Case-Shiller Home Price Index shows that prices are still up year-over-year, although they fell on a monthly basis in July. Fannie Mae researchers expect prices to fall 1.5% in 2023, while the MBA expects prices to rise 2.8% in 2023 and 2.1% in 2024.

Skyrocketing mortgage rates have pushed many promising buyers out of the market, slowing demand for home purchases and putting downward pressure on home prices. But rates could start falling next year, taking some of that pressure off. The current supply of homes is also historically low, which will likely prevent prices from falling too far.

What happens to house prices in a recession?

House prices generally fall during a recession, but not always. When this happens, it’s usually because fewer people can afford to buy homes and weak demand forces sellers to lower their prices.

How much mortgage can I afford?

A mortgage calculator can help you determine how much you can afford to borrow. Play around with different house prices and down payment amounts to see how much your monthly payment might be, and think about how that fits into your overall budget.

As a general rule, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means that your total monthly mortgage payment, including taxes and insurance, should not exceed 28% of your pre-tax monthly income.

The lower your rate, the more you’ll be able to borrow, so shop around and get pre-approved with multiple mortgage lenders to see who can offer you the best rate. But remember not to borrow more than your budget can comfortably support.

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