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Mortgage rates this week
Mortgage rates shifted downward in the week ending March 28. It was a fairly quiet week in terms of economic data, relieving rates from the upward pressures of recent data drops.
The 30-year fixed-rate mortgage averaged 6.69% APR, down 15 basis points from the previous week's average, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.
The 15-year fixed-rate mortgage averaged 5.96% APR, down 20 basis points from the previous week's average.
The 5-year adjustable-rate mortgage averaged 7.64% APR, down 18 basis points from the previous week's average.
Last week's meeting of the Federal Reserve, where the Fed governors chose to maintain short-term interest rates, didn't influence mortgage rates much. But the meeting did give us insight into when we might begin to see rate cuts from the Fed, which could translate to lower mortgage interest rates.
The March meeting of the Federal Reserve includes a Summary of Economic Projections. Released four times a year, these bundles of graphs and charts provide insight into how members of the Fed are thinking about the economy now and in the longer run. The SEP includes predictions for stats like GDP, unemployment and the target federal funds rate, which is the specific interest rate that the Fed raises or lowers.
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The funds rate is perhaps the most closely watched portion of the SEP. That data is displayed as a dot plot — each member of the Federal Reserve is anonymously represented by a dot. That's how we know, for example, that two members of the Fed don't think there should be any rate cuts at all in 2024. The current target level of 5.25% to 5.5% is fine by them.
But that's just two dots — well, people — out of 19. Almost half of the Fed's members agree that the target funds rate should be 4.5% to 4.75% by the end of 2024. That would be the equivalent of three 25-basis-point cuts.
That's more consensus than there was back in December 2023, when the previous SEP was released. At that point, five Fed governors were looking for a target funds rate that would take four or more 25-point cuts to reach. In the just-released March SEP, only one person opted for a four-cut level.
With the members of the Fed aligning like this, it's less about how much they might cut rates and more a matter of when. The next meeting, in May, doesn't look likely. But markets currently put a roughly 60% probability of a cut at the June meeting. Should that happen, house hunters looking to shop in spring and buy in summer could find mortgage rates falling.
» MORE: Buying a home in 2024? Here's what to expect
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