Mortgage Rates Average 7.21% at the Start of November

Fixed mortgage rates dipped this week, per an analysis of Bankrate data, while adjustable mortgage rates increased slightly. The average 30-year fixed mortgage rate is 7.21%, which is about double what it was at the beginning of the year. Borrowing costs for both fixed-rate and adjustable-rate mortgages remain at historic highs, leaving many homebuyers grappling with housing affordability challenges.

Here are the current mortgage rates, without discount points, as of Nov. 3:

A quick editorial note: You may have noticed updated sourcing – and more comprehensive data – in our mortgage rates analysis. The reasoning for this is twofold.

First, Freddie Mac will be making significant changes to its reporting and methodology beginning later this month. As a result of this change, it will no longer include rate data for ARMs. At a time when about 12% of homebuyers are choosing ARMs, according to the Mortgage Bankers Association, it’s increasingly important to include a benchmark for these borrowers.

Additionally, using data from our partner Bankrate allows us to provide a more in-depth look into average rates for various mortgage products, including FHA loans, VA loans and jumbo loans. And importantly, the new data is shown without discount points, which may result in higher average rates. Freddie Mac will also be eliminating discount points from its weekly analysis starting Nov. 17.

The Federal Reserve Board voted to increase its federal funds rate by another 75 basis points last week in its continued fight to tame inflation. This is the fourth consecutive rate hike of this size, highlighting the Fed’s ongoing commitment to bring inflation down to its 2% annual target.

Sam Khater, Freddie Mac’s chief economist, says in a statement that the latest interest rate hike “will certainly inject additional lead into the heels of the housing market.”

While the Fed doesn’t directly control mortgage rates, its monetary policy decisions have a tangible impact on rate trends. When the Fed raises its benchmark rate, it becomes more expensive for banks and lenders to issue money, and they pass on these added costs to borrowers in the form of higher interest rates.

However, one economist says that the Fed’s most recent rate hike won’t have much of an effect on mortgage rates, since lenders have long anticipated that the central bank would continue implementing sizable rate hikes.

“Even with the Federal Reserve raising its short-term Fed funds rate by another large amount, longer-term interest rates look to move only slightly,” Lawrence Yun, chief economist at the National Association of Realtors, says in a statement. “The mortgage market has already priced in the latest Fed move.”

This isn’t the first time analysts have said that lenders have already “priced in” the Fed’s rate hikes. Economists said similar things at the beginning of 2022, and mortgage rates have moved much higher (and faster) than initially predicted this year. Yet it remains true that interest rates will stay high until the Fed is able to get inflation under control.

“Once inflation is contained, mortgage rates will start to drift lower,” Yun adds. “It may be another year or two before that happens.”

In the meantime, though, mortgage interest rates remain at 20-year highs, Yun says – a fact that will continue to hurt housing affordability for today’s homebuyers.