Today’s mortgage and refinancing rates
Average mortgage rates rose significantly yesterday. This week’s sharp rises were smaller than last week’s sharp falls. But, overall, the two weeks almost exactly canceled each other out.
This swing has been a common feature of these rates for several weeks. And if this continues, mortgage rates will fall within the next seven days. But while I explain why this happens further down the page, unreliable templates like this are a terrible way to make important decisions. So I continue to make formal weekly predictions.
Current mortgage and refinancing rates
|program||Mortgage rate||April*||A change|
|Regular 30 year fixed||5,958%||5,993%||+0.04%|
|Regular 15 year fixed||5,125%||5.18%||+0.17%|
|Regular 20 year fixed||5,943%||5,999%||+0.06%|
|Regular 10 year fixed||5,163%||5,265%||+0.3%|
|30 year fixed FHA||6,047%||6,822%||+0.02%|
|15 year fixed FHA||5,277%||5,766%||+0.12%|
|30 year fixed VA||5,155%||5,373%||+0.04%|
|15 years of fixed V.A||5.2%||5,572%||+0.01%|
|Rates are provided by our affiliate network and may not reflect the market. Your rate may vary. Click here for a personalized quote. See our betting assumptions here.|
Should you lock in a mortgage rate today?
Don’t lock yourself in for a day when mortgage rates seem to be falling. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. As such, they do not change daily to reflect fleeting sentiment in volatile markets.
Mortgage rates continue to ride their metaphorical roller coaster, rising and falling rapidly. But like a real roller coaster, they ended up right where they started.
Some think it’s a good thing. Because it suggests that the markets are setting a floor and a ceiling that they won’t break without good reason. My only objection to this theory is that I doubt that markets are collectively capable of such complex thinking.
The result of all this is a lot of sound and fury – and very little else. Most of the sharp movements offset each other. And that left mortgage rates slightly higher in June and again in July.
Loyal readers (Hi!) may remember that I’ve been predicting exactly this for months: mortgage rates are continuing to rise, but at a much slower pace than during the first five months of the year.
So my personal recommendations for blocking bids remain:
- CASTLE when closing 7 days
- CASTLE when closing 15 days
- CASTLE when closing 30 days
- CASTLE when closing 45 days
- CASTLE when closing 60 days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine – or better. So let your intuition and personal risk tolerance guide you.
What drives current mortgage rates
There are currently two obsessions in the markets: inflation and a possible future recession. When they focus on the former, mortgage rates usually go up. When they shift their focus to recession fears, those rates usually fall.
Sometimes they turn their attention to a whim or a rumor. But mostly they’re doing so thanks to a new economic report.
Yesterday’s official employment report for June showed that hiring was holding up much better than expected. And that makes the prospect of any recession much more remote. As Comerica Bank Chief Economist Bill Adams wrote in his weekly e-newsletter yesterday:
The jobs report shows that the US economy was not in recession in the first half of the year.
So mortgage rates went up that day. And I shouldn’t be surprised if the data keeps them high or pushes them up for a while.
However, next week’s economic reports mainly focus on inflation. And Friday’s employment data could be quickly forgotten if those reports show cooling inflation. I don’t expect much good news on prices, so it would be a nice surprise if it comes along and pushes mortgage rates down.
Economic reports next week
Next Friday’s June retail sales data could show how well the U.S. economy is holding up to many global stresses — and thus how likely a recession is. But most of the important reports next week are about inflation and include the Consumer Price Index (CPI) and the Producer Price Index, which is an early indicator of where prices are headed.
As already mentioned, inflation is one of the two main obsessions of the markets at the moment. So we may well see volatility.
The potentially most important reports below are in bold. The rest are unlikely to move the markets much unless they contain shockingly good or bad data.
- monday is Three-year inflation expectations in June
- Tuesday – June National Federation of Independent Business (NFIB) Small Business Index
- Wednesday is June consumer price index
- Thursday — June producer price index for final demand. Weekly new unemployment insurance claims through July 9
- Friday – June retail sales. Plus industrial production and capacity utilization for this month. Also July consumer sentiment index
This is an unusually difficult week for these reports.
Forecast of interest rates on mortgage loans for the next week
Again, there’s no predicting what might happen to mortgage rates next week. Sorry, but there is too much volatility right now to even guess.
I believe mortgage rates are more likely to go up a bit more than down in the next few weeks. But the next seven days could go either way. And you should expect a lot of sharp up and down movements for some time.
Mortgage and refinance rates usually move in tandem. And the evil of Art adverse market refinancing fee the past year has largely bridged the gap that grew between them.
How the mortgage interest rate is determined
Mortgage rates and refinancing rates are usually determined by prices in the secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.
And it depends a lot on the economy. Therefore, mortgage rates tend to be high when things are going well and low when the economy is in trouble.
But you play a big role in determining your own mortgage rate in five ways. And you can make a big difference:
- Shop around for the best mortgage rate—these vary widely from lender to lender
- Improving your credit score — Even a small bump can make a big difference to your rate and payments
- Save the Biggest Down Payment You Can – Lenders love you to have real skin in the game
- Keep your other debt modest — The smaller your other monthly obligations, the bigger your mortgage you can afford
- Choose your mortgage carefully — are you better off with a conventional, conforming, FHA, VA, USDA, subprime, or other loan?
The time it takes to get those ducks in a row can result in you getting lower bids.
Remember, it’s not just a mortgage rate
Don’t forget to factor in all of your future home ownership costs when you’re figuring out how much of a mortgage you can afford. So focus on your “PITI”. This is yours Principal (pays back the amount you borrowed), iinterest (loan value), (property) Taxes, and (homeowners) iinsurance Ours mortgage calculator can help with that.
Depending on the type of mortgage and the amount of your down payment, you may also have to pay mortgage insurance. And it can easily be three figures every month.
But there are other possible costs. Therefore, you will have to pay your home owner association dues if you choose to live somewhere with a HOA. And wherever you live, you should expect the cost of repairs and maintenance. No landlord to call when things go wrong!
Finally, closing costs will be hard to forget. You can see these reflected in the annual percentage rate (APR) that lenders will show you. Because it actually spreads them over the life of the loan, making it higher than your mortgage rate.
But you can get help with closing costs and your down payment, especially if you are a first time buyer. Read:
Mortgage rate methodology
Mortgage Reports receives rates based on selected criteria from several credit partners every day. We get the average rate and annual percentage rate for each type of loan to display in our chart. Because we average a set of bids, this gives you a better idea of what you can find in the market. In addition, we average the rates for the same types of loans. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and their changes over time.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for any products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policies or positions of Full Beaker, its officers, parent company or affiliates.