Today’s mortgage and refinance rates
Average mortgage rates rose appreciably yesterday. And you now have to go back nearly a month to find an average rate higher than Friday’s closing one.
No, I still can’t forecast what will happen to mortgage rates next week. Rates are simply too volatile and unpredictable to make even a guess.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||5.891%||5.927%||+0.18%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||5.205%||5.261%||+0.08%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||5.94%||5.993%||+0.17%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||5.162%||5.252%||-0.13%|
|30 year fixed FHA|
|30 year fixed FHA||5.542%||6.299%||+0.05%|
|15 year fixed FHA|
|15 year fixed FHA||5.411%||5.902%||+0.02%|
|30 year fixed VA|
|30 year fixed VA||5.22%||5.439%||-0.14%|
|15 year fixed VA|
|15 year fixed VA||5.404%||5.767%||-0.1%|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
Should you lock a mortgage rate today?
Don't lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.
Read the following section to discover why mortgage rates have been rising this week and why I think they’ll probably slowly move yet higher.
However, that’s a prediction for the next few months, not next week. It’s quite possible that rates will tumble over the next seven days. They often do after a period of sharp rises. But that’s far from inevitable. And I shouldn’t be surprised if they kept climbing. In other words, anything could happen.
Here are my personal rate lock recommendations:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- LOCK if closing in 45 days
- LOCK if closing in 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 gut and your own tolerance for risk help guide you.
What’s moving current mortgage rates
What explains this week’s sharp rise in mortgage rates? There are likely several drivers, but probably the most significant concerns the Federal Reserve. But it’s not the Fed’s fault.
You may remember that the latest inflation figures (from the consumer price index or CPI) suggested prices are plateauing and may be set to fall. Markets seemed to think that would mean the Fed would ease up on its rate hikes.
It’s not clear where investors got that idea. Because the Fed has been crystal clear that it will require incontrovertible evidence over several months of slowing inflation before taking its foot off the hike gas.
Fed steps in
And several of the central bank’s top officials spoke out this week, trying to correct markets’ misapprehensions. They made it clear that rate hikes were likely for several more months, probably into 2023. And that it was still possible that another large, 75-basis-point (0.75%) rise would be announced on Sep. 22. Recent rises in mortgage rates suggest the message is getting through.
I mentioned yesterday a Thursday article in The Wall Street Journal (paywall) that appeared under the headline, “Wall Street Bets the Fed Is Bluffing in High-Stakes Inflation Game.” I’d back the Fed.
Of course, the Fed doesn’t directly set new mortgage rates. They’re mostly determined by yields on a type of bond called a mortgage-backed security (MBS). And MBSs have their own market. But the investors who buy and sell those bonds are certainly influenced by Fed policy.
Mortgage rates for the rest of 2022
Of course, nobody can predict the future. But I reckon the mostly likely scenario for mortgage rates over the rest of this year is that they’ll continue to rise. Still, I’m hoping and expect that they’ll climb at a much more gentle pace than they did during the first half of 2022.
Yes, it’s still possible that they’ll fall in a sustained way. For example, we could see a sudden slide into a global recession. That should pull mortgage rates lower. And it’s not a fanciful idea. A combination of exceptional droughts in many of the most productive parts of the world and Russia’s continuing war in Ukraine might easily create an international economic slowdown.
But we’re weighing probabilities here. And I suspect that it’s more likely that we’ll stagger on, at least over the next few months. Let’s hope I’m not wrong.
Economic reports next week
By far the biggest economic event next week is Friday’s publication of the personal consumption expenditures (PCE) report. This provides a wealth of critical information, including the Fed’s preferred measure of inflation, the PCE price index.
Of course, assuming the Fed’s message described above has sunk in, investors might react to good inflation data in a muted way. But bad news about prices could send mortgage rates higher.
Critical reports in the following calendar are shown in bold. Other reports next week are unlikely to move markets or mortgage rates much unless they contain shockingly good or bad data.
- Tuesday — August “flash” (preliminary) purchasing manager indexes (PMIs) for the manufacturing and services sectors from S&P
- Wednesday — July orders for durable goods and core capital goods. Plus the pending homes sales index for the same month
- Thursday — Second revision (of three) to gross domestic product (GDP) estimate for the second quarter of 2022. Plus weekly new claims for unemployment insurance to Aug. 20
- Friday — PCE suite of July data. Plus August consumer sentiment index
Barring surprises, Friday’s likely to be the day to watch.
Mortgage interest rates forecast for next week
For as long as the current volatility lasts, I shan’t be able to to predict where mortgage rates will move on a weekly basis. Sorry. Your tossing a coin is as good a guide as I can be.
How your mortgage interest rate is determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.
And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble. But inflation rates can undermine those tendencies.
But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Shopping around for your best mortgage rate — They vary widely from lender to lender
- Boosting your credit score — Even a small bump can make a big difference to your rate and payments
- Saving the biggest down payment you can — Lenders like you to have real skin in this game
- Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
- Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?
Time spent getting these ducks in a row can see you winning lower rates.
Remember, they’re not just a mortgage rate
Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.
Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.
But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!
Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.
But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.