See mortgage rates for Wednesday, May 9, 2024

Mortgage rates increased this week, partly in response to the Federal Reserve's announcement at its May 1 meeting that it is not cutting the federal funds rate yet.

However, we may see rates tick down soon.

On Friday, the Bureau of Labor Statistics' April jobs report showed that the United States added 175,000 new jobs last month and the unemployment rate rose to 3.9%. According to Bloomberg data, economists had predicted 240,000 more jobs and for unemployment to stay at 3.8%.

Although there are plenty of cons to rising unemployment rates, they're usually good news for mortgage rates — rates tend to go down when the economy struggles. So while mortgage rates probably won't plummet this week, we may see a slight dip when Freddie Mac releases the latest rates tomorrow.

Learn more: How to get a mortgage

Mortgage rates today

The average 30-year mortgage fixed rate this week is 7.22%, according to Freddie Mac. This is a five-basis-point increase from last week.

The national average 15-year fixed mortgage rate also rose this week. The 15-year rate is 6.47%, which is up three basis points since last week. Both rates are a little bit over their four-week averages.

Is now a good time to buy a home?

It probably doesn’t feel like a good time to buy a house, but it may be a better time than you think. Today’s 30-year mortgage rates have surpassed 7%, which feels terrible compared to 2021 when many people could get a rate under 3%.

But keep in mind, the highest mortgage rate was 18.63% in October 1981. Suddenly, 7.22% doesn’t seem so bad, does it? It’s also extremely unlikely that rates will drop to below 3% anytime soon unless another unexpected anomaly like the COVID-19 pandemic happens again.

Also, even though house prices are high, they are growing less aggressively than they were a couple of years ago. And new-home construction is starting to pick up.

In a nutshell: It isn’t a fantastic time to buy a house. Rates are relatively high, and even though new homes are being built, there’s still a lot of room for improvement. But it’s probably a better time to buy than many people think it is. And remember, you can always lock in a rate now and refinance into a lower rate in a few years if rates decline later.

Learn more: Is it better to build or buy a house?

Should you get a HELOC now?

If you’re already a homeowner and need some extra money, 2024 could be a good time to get a home equity line of credit (HELOC).

A HELOC is a type of second mortgage that lets you borrow against the equity in your home. Since home values have soared in the last few years, you may have built up quite a bit of equity.

Unlike a home equity loan that lends you money all in one lump sum, a HELOC is a line of credit, so you can tap into it whenever you need money. And you only have to pay interest on the money you end up borrowing. If you don’t use the full line of credit, you don’t have to pay interest on the money you didn’t touch.

HELOCs usually start with lower interest rates than home equity loans. The rates are usually adjustable, meaning you risk your rate increasing later — but if rates continue to trend downward, your rate might actually end up decreasing down the road.

Dig deeper: HELOC vs. home equity loan

Still, do your homework before applying for a HELOC. Do the math, weigh the pros and cons, and talk to your lender. It can be a good time to use that money for things like home improvements that will increase your house’s value even more, but using the line of credit for non-essential expenses can be risky.