How long will home loan interest rates fall in November?

High inflation and higher interest rates have meant that borrowers have struggled over the past few years. But even in an environment of high borrowing costs, home equity loans remain an option worth considering for those looking to increase their home equity. Since this Home equity loans and lines of credit (HELOCs) Backed by your home, they usually have lower interest rates than credit cards and other types of loans.

Fortunately, the credit environment is also changing for the better. Inflation is down, and Federal Reserve cuts interest rates to 0.50% in September. With the Fed meeting coming up on November 6 and 7 – and another meeting scheduled for December – some economists expect further interest rate cuts, which could make borrowing more affordable.

While the new development looks promising, nothing is certain. Interest rates on many types of loans, including home equity rates, were higher in October. On November 1, 2024, home equity loans and HELOCs average rates of 8.35% and 8.68%respectively. So, could events in November push home loan rates lower, and if so, by how much?

Compare today’s top home equity loan rates here.

How long will home loan interest rates fall in November?

Let’s take a look at what could happen to home equity loan interest rates in November and how it could affect you.

A decrease in small home equity rates is possible

If the Fed lowers the federal funds rate as some anticipate, a corresponding decrease home equity loan and HELLO rates may be. CME Group’s FedWatch tool shows a 98% chance the bank will cut rates at its November meeting. When that happens, both new and existing HELOC rates can go down, as they vary and adjust monthly.

In contrast, home equity loan rates may not immediately see the impact of the Fed’s interest rate cuts, because they usually stay and does not adjust like a HELOC rate.

“If the Fed drops rates a quarter, then you could see HELOC rates drop by a quarter,” said Mason Whitehead, branch manager at Churchill Mortgage. “I don’t think anyone expects another 50 basis point rate cut, and there’s been some talk of no cut at all.”

Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation, shared a similar view but pointed to December as a possible turning point.

“I don’t expect the Federal Reserve to drop rates at the next meeting for November 6-7. However, they will meet for the last time for 2024 in mid-December. Depending on what economic news comes out, the Fed may reduce rates. then,” said Schachter.

Find out what home equity loan rates you can afford.

Home equity loan rates tend to remain stable

If you think about it tap into your home equity for cash, you can find slightly lower rates in November. Note that some experts expect rates to stay the same or even slightly lower in the short term.

“I expect home equity loan rates to stay the same in November,” Schachter said. “The Federal Reserve did a major decrease of 0.50% in September. Since then other economic data has come out that shows that the labor market is still very strong.”

Schachter believes the direction of rates for home equity loan options may depend on the upcoming November jobs report by the US Bureau of Labor Statistics.

“If the economy is still hot, I do not expect the Federal Reserve to drop rates in November,” said Schachter.

Whitehead expects interest on HELOCs to rise and expects rates to stay the same or drop slightly.

“HELOC rates are usually tied to the prime, so they are affected when the Fed lowers or raises the federal funds rate. I believe these rates will remain flat, but if the Fed lowers rates in November, you could see a small drop in HELOC rates. excited about, but every little bit helps,” said Whitehead.

Bottom line

While November’s 0.25% rate drop could help you save money, remember that it’s not guaranteed, and depending on how much you owe, the potential savings may not be much. There is no way to predict with 100% certainty if rates will go up, down or stay the same, focus on what you can control. If you’re happy with the payment and the loan fits your financial goals, moving forward is possible.

“A home equity loan shouldn’t be a quick decision, but one that fits your long-term financial goals,” says Alex Beene, a financial literacy instructor for the University of Tennessee at Martin. “If you use it sparingly and to add value to life either for investment in yourself or something you plan to sell in the short or long term, then it can be a savvy decision. If you don’t have a plan outlined, it’s a risk you shouldn’t take. “