Mortgage and Refinance Rates Today: Economic Factors Drive Rates Up

Mortgage and refinance rates have been on a rollercoaster ride in 2024, with recent economic indicators pushing them back up. The latest data from the Mortgage Reports shows that the average 30-year fixed mortgage rate reached 6.7% on December 13, 2024, while the 15-year fixed rate stood at 6%. These rates, though elevated, are still below the summer peak of 7%.

Economic indicators have played a significant role in driving mortgage rates. Inflation, as measured by the Consumer Price Index (CPI), has been a key concern. In November 2024, the CPI rose 0.1%, indicating that inflation remains a challenge. This, coupled with stronger-than-expected job growth, has led to an increase in mortgage rates. The monthly Import Price Index, released on December 14, 2024, also rose 0.1% in November, further contributing to the upward pressure on rates.

Gross Domestic Product (GDP) growth has also influenced mortgage rates. The U.S. economy grew at an annualized rate of 2.5% in the third quarter of 2024, according to the Bureau of Economic Analysis. This growth, while modest, has contributed to the upward trend in mortgage rates.

The Federal Reserve's monetary policy has also played a role in shaping mortgage rates. The Fed has been cutting interest rates in response to economic conditions, with the federal funds rate currently at 4.5% to 4.75%. However, the Fed's actions are not the sole determinant of mortgage rates, which are influenced by a complex interplay of macroeconomic and industry factors.

In conclusion, the latest economic indicators, such as inflation and GDP growth, have contributed to the recent uptick in mortgage and refinance rates. While these rates remain below their summer peak, they continue to be influenced by economic conditions and monetary policy. As investors and homeowners navigate this dynamic environment, it is crucial to stay informed about economic trends and their impact on mortgage rates.