Trending Mortgage Rates | FirstTuesday Journal

The interest rate on an average 30-year fixed-rate mortgage (FRM) rose slightly to 6.44% in the week ending October 11, 2024. The average 15-year FRM rate also rose to 5.63%.

Look for FRM rates to fall across the board in 2024 as the Fed does its job to fully stabilize consumers inflation (and job growth) after the pandemic disruption. Expect the FRM interest rate to decline through 2025, followed by a long-term upward trend that began in 2013 with the introduction of a half-cycle of approximately 30 years of rising interest rates for all types of loans.

In the long term, property sellers suffer from higher FRM rates as asking prices are primarily supported by the amounts buyers can borrow to finance a purchase. Therefore, an increase in the FRM rate forces sellers to lower prices or exit the market.

Buyers also rely on mortgage financing with purchase money

reduce their standard of living and purchase a house in a lower price range, or, more likely,
Simply wait for the asking prices to drop until prices match their reduced purchasing power.

Buyer More and more people are feeling that the economic situation by 2025 will create economic conditions that are incompatible with the purchase of an overpriced property financed with rising mortgage interest rates. The result is that more and more buyers are moving to the sidelines. However, buyers (the patient buyers and their agents) will soon find their situation improving. As inventory for sale grows, sellers are forced to do so Reduce prices to unload property they no longer want.

In principle, FRM rates are tied to the 10-year Treasury market, as are capitalization rates (cap rates) to determine property value. The 30-year FRM rate moves in parallel with the 10-year Treasury Note rate plus the lender’s risk premium between 1.5% and 3.0% based on default risk. Historically, the risk premium spread between the 10-year T-note rate and the 30-year FRM rate is 1.5% in normal times. With cap rates, the spread is much larger.

However, as of October 11, 2024, the interest rate on 10-year T-notes is 4.08%. Thus, the spread between the 10-year T-note and the 30-year FRM rate is 2.36%, above the historical risk premium Spread of 1.5%. Today’s generous spread suggests that lenders continue to increase their risk premiums in anticipation of future interest rate hikes – and foreclosures due to defaults.

The average monthly rate Adjustable Rate Mortgages (ARMs) is on an upward trend, averaging 6.40% in October 2024. The interest rate on the ARM is higher than the 15-year FRM and higher than the 30-year FRM rate – although the limited savings are not worth the significant risks associated with ARMs. Therefore, a riskier ARM is useless for buyers looking to increase their borrowing capacity.

This reversal of FRM and ARM rates has completely eliminated the attractiveness of ARMs, except for mortgage-financed high-end residential and commercial properties. As a result, the support for low- and mid-priced ARMs that was provided prior to the reversal is now no longer available.

Updated October 18, 2024.

Click the link to go directly to a chart or browse charts by scrolling below.

1. 30-Year Fixed Rate Mortgage (FRM), Weekly – Map update 10/18/24
2. 30-year FRM rate, monthly – Map update 12/29/23
3. 15 year FRM rate – Map update 10/18/24
4. 5/1 Monthly Adjustable Rate Mortgage (ARM) – Map update 10/18/24
5. 10-year Treasury note interest rate – Map update 10/18/24
6. Combined interest rates for FRM and 10-year Treasury notes – Map update 9/13/24
7. 91 Day Treasury Exchange Rate – Map update October 18th/24
8. 3 Month Treasury Bill – Map update 10/11/24
9. 6 Month Treasury Bill – Map update 10/11/24
10. Average Treasury Bond Yield (CMT) – Map update 10/11/24
11. 12-month Treasury Average – Map update 10/11/24
12. Secured Overnight Financing Rate (SOFR) – Map update 10/18/24
13. Applicable Federal Tariffs – Map update 9/13/24

https://www.traditionrolex.com/32


Map update 10/18/24
Current 10/18/24 6.44%	A month ago 09/20/24 6.08%	A year ago 10/20/23 7.63%
The average 30-year FRM rate in California is provided by the St. Louis Federal Reserve Bank.

Map update 12/29/23
Dec. 2023 Average 6.82%	November 2023 Average 7.36%	Dec. 2022 Average 6.36%



Map update 10/18/24
Current 10/18/24 5.63%	A month ago 09/20/24 5.16%	A year ago 10/20/23 6.92%
The average 15-year FRM rate in California is provided by the St. Louis Federal Reserve Bank.



Map update 9/13/24
August 2024 6.34%	July 2024 6.73%	August 2023 7.10%
The 5/1 average interest rate for an adjustable rate mortgage (ARM) shows the average interest rate for the first five years after origination. After the initial five-year period, the ARM interest rate adjusts annually based on an index number, such as a specific Treasury bill interest rate (which reflects Federal Reserve interest rate movements) or the Secure Overnight Financing Rate (SOFR). The average ARM rate comes from Freddie Mac’s survey in the western region of the United States


Map update 10/18/24
Current 10/18/24 4.08%	A month ago 09/20/24 3.74%	A year ago 10/20/23 4.90%
This interest rate is a leading indicator of the direction of future Freddie Mac interest rates. The 10-year interest rate has historically been closer to 4% when the money market is stable. The rate is influenced by global demand for the dollar and expected future domestic inflation.



Map update 9/13/24
On average 15 years August 2024 5.68%	Average 30 years August 2024 6.50%	Average 10 year T grade August 2024 3.88%
The average 15-year and 30-year conventional commitment rates are the interest rates at which a lender commits to lending mortgage funds in the US West/California for the duration of the term of the applicable mortgage, as quoted by Freddie Mac. The green line reflects the 10-year Treasury Note Average, a leading indicator of the direction of Freddie Mac’s future interest rates. It is made up of the level of global demand for the dollar and expected future domestic inflation. Further information:

Map update 10/18/24
Current 10/18/24 4.63%	A month ago 09/20/24 4.88%	A year ago 10/19/23 5.50%
This rate determines the minimum interest rate that the seller must use and report in a delayed §1031 transaction if it does not receive interest on §1031 funds held by an agent/accommodator. This rate also determines the amount of ordinary income that the facilitator/accommodator must report.


Map update 10/11/24
September 2024 4.72%	August 2024 5.05%	September 2023 5.32%
The 3-month Treasury bill is the interest rate heavily influenced by the Federal Reserve through the Fed Funds Rate as the base price for short-term borrowing. It is used to determine the 3-month to 10-year yield range to predict the likelihood of a recession in a year. The rate shown is the monthly average for the month listed. Tariffs are published with a 1-2 month reporting delay.


Map update 10/11/24

The six-month T-Bill rate is one of several indices used by lenders to periodically adjust the interest rate on an adjustable-rate mortgage (ARM). The adjusted interest rate is equal to the indexed interest rate (at the time of adjustment or an average of several previous interest rates) plus the lender’s profit margin. The rate shown is the monthly average for the month listed. Tariffs are published with a 1-2 month reporting delay.


Map update 10/11/24
September 2024 4.03%	August 2024 4.43%	September 2023 5.44%
This index is one of several indexes used by lenders under their ARM to periodically adjust the bond’s interest rate. The ARM interest rate is equal to the T-bill yield plus the lender’s profit margin. The index is an average of T-Bill yields with maturities adjusted to one year.


Map update 10/11/24
September 2024 4.93%		September 2023 4.93%
This index is one of several indexes used by lenders under their ARM to periodically adjust the bond’s interest rate. This number is an average of the one-year T-bill rates over the past 12 months. The ARM interest rate is equal to the Treasury’s 12-month average yield plus the lender’s profit margin. There is a one to two month lag in data reporting for the 12-month Treasury average.

Map update 10/18/24
10/18/24 4.85%	09/20/24 4.83%	08/31/23 5.31%
This index is one of several indexes used by lenders under their ARM to periodically adjust the bond’s interest rate. It replaced LIBOR in 2021, which was manipulated in the years before the 2008 recession and financial crisis. The ARM interest rate is equal to the SOFR interest rate plus the lender’s profit margin. The interest rate is based on overnight borrowing in the U.S. Treasury repo market. SOFR is created in a transparent manner, is based on observable transactions rather than models, and, unlike LIBOR, is not dependent on bank estimates.


Map update 10/11/24
Short (3 years or less) Oct. 2024 3.15%	Medium (3 to 9 years) Oct. 2024 2.77%	Long (9+ years) Oct. 2024 3.06%
These interest rates determine the minimum reportable interest rate of return for carryback financing. The AFR category is determined by the carryback due date. Prices are for monthly payments and reported for the coming month.

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