Mortgage Rates Decline for the week ending February 1st, 2025

Mortgage Rates Decline for the week ending February 1st, 2025 : What Homebuyers Need to Know

For the fourth consecutive day, 30-year mortgage rates have declined, reaching their lowest level since mid-December. This downward trend provides a potential opportunity for homebuyers looking to buy with a more favorable rate. However, other mortgage types saw mixed movement, reinforcing the importance of shopping around for the best rate.

National Averages of Lenders' Best Mortgage Rates for New Purchases(January 31, 2025):

• 30-Year Fixed: 6.83%

• FHA 30-Year Fixed: 7.09% 

• 15-Year Fixed: 5.97% 

• Jumbo 30-Year Fixed: 6.81%

• 5/6 ARM: 7.33%

The 30-year fixed rate now sits at 6.83%, marking a significant drop from its 7.13% high just two and a half weeks ago. Although this rate remains higher than its September low of 5.89%, it is still an improvement from last spring’s 7.37% peak and well below the 23-year high of 8.01% in October 2023.

Additional Mortgage Rate Insights

• The 15-year fixed rate decreased to 5.97%, staying more than a percentage point below its October 2023 high of 7.08%.

• Jumbo 30-year mortgage rates slightly increased to 6.81%, but remain well below their October 2023 peak of 8.14%.

Why Mortgage Rates Fluctuate

Mortgage rates are affected by various economic and industry factors, including:

• Bond Market Performance: The movement of 10-year Treasury yields heavily influences mortgage rates.

• Federal Reserve Policy: The Fed’s monetary policy decisions, including interest rate changes and bond-buying activities, impact lending conditions.

• Lender Competition: Rates can vary between lenders based on market demand and risk assessments.

What This Means for Homebuyers

The recent decline in mortgage rates presents an opportunity for buyers to secure more affordable financing. However, given the unpredictable nature of rate movements, it's advisable to compare offers from multiple lenders to find the best deal. Additionally, factors like credit score, down payment, and loan type will significantly impact the final rate a borrower receives.

Final Thoughts

While mortgage rates remain lower than their historic peak in 2023, they continue to be influenced by economic conditions and Federal Reserve policy. Whether you're buying a home or refinancing, staying informed on rate trends and shopping around can help you secure the best possible mortgage deal.

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Looking for a lender or have questions about mortgages? Please reach out to Aaron at TBF Mortgage https://www.tbfmortgage.com/aaron-bohn

Josh