Mortgage Rates Today, Sep. 13, 2024: Fed in Focus
The average 30-year fixed rate mortgage is 5.64% today, a decrease of 0.03% since yesterday. The 15-year fixed mortgage rate stands at 4.68%, down by 0.03%. The 30-year FHA mortgage now averages 5.06%, having dropped by 0.06. Meanwhile, the 30-year jumbo mortgage rate is 6.24%, reflecting a decrease of 0.08%.
In brief
The Federal Reserve meets next week to decide on the size of the near-certain cut to general interest rates, which it will announce on Wednesday.
As we explain in a moment, how big that cut is could affect mortgage rates. But probably the most crucial event next week for those rates might be the release of the Fed's "dot plot," which is due at the same moment as the announcement.
The dot plot is a graphic representation of where rate-setters think general interest rates will move over the coming months and years. And knowing that is pure gold to markets.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 5.64% | 5.75% | -0.03% | -0.85% |
| 15-Year Fixed | 4.68% | 4.84% | -0.03% | -0.84% |
| 30-Year Fixed FHA | 5.06% | 5.97% | -0.06% | -0.84% |
| 30-Year Fixed VA | 5.04% | 5.25% | -0.04% | -0.89% |
| 30-Year Fixed USDA | 4.99% | 5.19% | -0.05% | -0.87% |
| 30-Year Fixed Jumbo | 6.24% | 6.34% | -0.08% | -0.83% |
| 5/6 Year ARM | 6.22% | 6.34% | +0.01% | -0.51% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 5.68% | 5.8% | -0.07% | -0.89% |
| 15-Year Fixed | 4.69% | 4.85% | -0.03% | -0.83% |
| 30-Year Fixed FHA | 5.05% | 5.97% | -0.08% | -0.83% |
| 30-Year Fixed VA | 5.06% | 5.27% | -0.05% | -0.87% |
| 5/6 Year ARM | 6.31% | 6.43% | -0.02% | -0.47% |
The Fed
Markets are desperate to know two things:
- By how much will the Fed cut general interest rates next week? (A cut is nearly inevitable)
- How large and frequent do the people who decide rate levels think subsequent cuts will be?
And, right now, markets have no clue. You can see that in the volatility in the CME FedWatch tool. Yesterday, investors were giving a probability of only 28% to a larger, half-point cut. Today, that number's risen to 43%.
You'd probably like to see that larger cut because it might push mortgage rates yet lower. The smaller cut has already been priced into those rates, meaning they likely won't be affected by it.
Indeed, there's a chance mortgage rates could rise if a smaller, quarter-point cut is announced. That's because those investors who backed the larger one will have to adjust their portfolios.
Yesterday, The Wall Street Journal summed up what it called the Fed's "dilemma:"
"The central bank is set to reduce rates for the first time since 2020 at its meeting on Sept. 17-18. Because officials have signaled greater confidence that they can make multiple rate cuts over the next several months, they are confronting questions over whether to cut by a traditional 0.25 percentage point or by a larger 0.5 point."
FOMC
The Fed's rate-setting body is called the Federal Open Market Committee (FOMC). It meets only eight times a year, and on four of those occasions releases a Summary of Economic Projections.
Such a summary is due next Wednesday and will include a dot plot. Each voting member of the FOMC gets to place his or her expectations for future rate movements on a graph.
This quarterly insight into the expectations of the people who decide on where rates will go is catnip to markets. And it may well be that it will have a greater impact on mortgage rates than the size of the rate cut that's announced on Wednesday.
After all, who cares if there's only a quarter-point cut that day if there are more penciled in for Nov. 7, Dec. 18, and into 2025?
Coming up
Mortgage rates today
This morning will bring the preliminary consumer sentiment index for September. According to MarketWatch, it is expected to show an improvement to 68.4 from August's 67.9. A lower-than-expected number might help push mortgage rates lower — but probably only a bit.
The import price index (IPI) for August is also scheduled for this morning. It has the distinction of being the least important of the inflation reports and rarely troubles mortgage rates much.
Next week
The FOMC's meeting on Wednesday is likely to dominate next week.
But, on Tuesday, we're due August reports for both retail sales and industrial production. If they show a booming economy, that could encourage the Fed to opt for a smaller rate cut.
Peter Warden has been covering mortgage, real estate, and personal finance for 15 years. He has appeared on The Mortgage Reports, Credit Sesame, Bills.com, and other publications.
