Mortgage Rates and Payments Keep Rising, Creating Market Misery
Current mortgage rates continue to rise and record payment rates combine to create a glum market.


Since September of 2023, the Federal Reserve has held the federal funds rate, a key overnight bank lending rate, at unchanged levels. Previously, there were 11 rate hikes that began in March 2022 in an attempt to combat inflation, which has caused consumers to face higher commercial interest rates, especially mortgage rates. But good news for borrowers — interest rate cuts are expected for later this year.
Although mortgage rates are largely dependent on the 10-year Treasury yield and not the federal funds rate, they've started to come down. According to Freddie Mac, as of March 20, the most recently available data, the average 30-year mortgage rate was 6.74%. There have been declines totaling almost a quarter of a percentage point over the last two weeks. Despite the recent dip, mortgage rates remain high.
However, as many expected, the Federal Reserve held interest rates steady at the latest meeting in March, following four previous rate pauses. This means that the federal funds rate will remain the same, at a target range of 5.25% to 5.5%. And the Fed is still expected to cut rates later this year.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“Recent statements from top Fed officials that inflation is inching closer to the Fed’s 2% target level likely means that further interest rate increases will remain on hold for now. This also supports the growing expectations that the Fed will begin lowering interest rates at some point in 2024, though the timing remains uncertain," says Michele Raneri, vice president of U.S. research and consulting at TransUnion. "The prospect of future rate reductions is particularly important at a time when US consumers continue to take on historically high levels of debt, particularly on credit cards, as lower interest rates may allow for some of them to refinance that debt and put more money in their pockets."
Along with food, energy and real estate prices remaining high, home ownership can feel extremely challenging at the moment. As a result, many first-time buyers are backing out of the market altogether. For current homeowners, a survey from Redfin reveals that in March, mortgage payments hit the highest they've ever been. The results showed the typical homeowner paying $2,563 on mortgage payments, 29% higher than they'd have paid in 2022.
Not surprisingly, the latest Home Purchase Sentiment report from Fannie Mae shows that a decline of 3.6 points saying "the decline was partly driven by a substantial decrease in consumers’ sense of home-selling conditions."
How to get the lowest rate
Follow these tips to shop for low mortgage rates.
- Increase down payment: The bigger the down payment you make on a house, the better your rate. To qualify for the lowest rates you’ll likely need a 20% down payment.
- Raise credit score: The most important factor in determining your mortgage rate is your credit score. The higher your score, the less risk you pose to lenders, so it’s important to raise your credit score as much as possible before applying for a mortgage. Typically, you’ll need to have a FICO score of 760 or higher in order to be eligible for the lowest rates.
- Consider an adjustable-rate mortgage: An adjustable-rate mortgage (ARM) starts out with rates lower than those you’d get with a fixed-rate mortgage. After a certain time period, the rates will adjust based on market indexes. If you know you will be selling your home in the future, this could be a good option to save on interest.
- Shop around: It’s important to get multiple quotes before applying for a mortgage, and you can often find lower mortgage rates from local lenders and credit unions. Try a mortgage comparison tool to find the best rates for you.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.
-
The Most Popular Apps for Retirement Planning in 2025
A J.D. Power survey ranks retirement planning apps based on customer service and satisfaction. Does your financial app make the cut?
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
Can You Afford a Million-Dollar Home on a $250,000 Salary?
It’s more than the sticker price — mortgage rates, down payments, taxes and debt all factor into whether a million-dollar home fits your budget.
-
Why a Landmark Real Estate Commission Settlement Hasn’t Lowered Costs for Homebuyers
The 2024 NAR settlement promised commission transparency and negotiation —but one year later, average fees remain unchanged. See why change has been slow and what it means for homebuyers and sellers.
-
Lock or Float? How to Decide on Your Mortgage Rate
Mortgage rates move daily, here’s how to know if you should lock in a rate now or let it float until closing.
-
The Role of a Mortgage Underwriter in Buying a Home
From fast-track approvals to manual reviews, here’s what to expect (and how to avoid delays) in the underwriting process.
-
My Mortgage Rate is 6.5%. Should I Refinance If Rates Fall By Half a Point
A half-point dip may not be enough to offset closing costs. Here's the magic number that makes refinancing pay off.
-
How Home Appraisals Work — and What the Final Value Means
From comps to contingencies, here’s what a home appraisal reveals about your property’s true worth.
-
Should You Sell Your House Now or Wait? What to Consider
With rates holding steady and market shifts ahead, here's how to decide whether to list your house or wait.
-
The 28% Rule for Housing: Does It Still Work in Today’s Market?
Rising home prices and stubborn mortgage rates put this long-standing rule to the test.