Today’s mortgage and refinance rates
Average mortgage rates fell yesterday for a second consecutive day. But rises earlier in the week mean they were appreciably higher yesterday evening than they were seven days earlier.
Once again, I’m not in a position to forecast where mortgage rates will move next week. Economic data have been telling conflicting stories, and those rates are simply too volatile.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||5.852%||5.885%||+0.01%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||5.28%||5.338%||+0.03%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||5.921%||5.967%||-0.04%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||5.131%||5.217%||-0.04%|
|30 year fixed FHA|
|30 year fixed FHA||5.537%||6.296%||+0.03%|
|15 year fixed FHA|
|15 year fixed FHA||5.492%||5.986%||+0.05%|
|30 year fixed VA|
|30 year fixed VA||5.282%||5.502%||-0.3%|
|15 year fixed VA|
|15 year fixed VA||5.449%||5.812%||+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.
In my view, mortgage rates are more likely to gently rise than fall over the rest of this year. But some experts disagree with me.
Still, my personal rate lock recommendations remain:
- 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
Yesterday, Federal Reserve Chair Jerome Powell made a singularly important speech, which made headlines around the world.
According to The New York Times (paywall), Mr. Powell “delivered a sobering message on Friday, saying the Fed must continue to raise interest rates — and keep them elevated for a while — to bring the fastest inflation in decades back under control.”
You can read a transcript of the speech on the Fed’s website. But perhaps Mr. Powell’s most telling message was:
We are taking forceful and rapid steps ... We will keep at it until we are confident the job is done.
He also acknowledged that rate hikes would bring “some pain to households and businesses.” He continued, “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
What that means is that the Fed will continue to hike general interest rates for months to come. And if its actions cause a recession, so be it.
Markets had no reason to expect a less forceful message. But that didn’t stop them hoping for one. And stock markets plunged on news of the speech: the S&P 500 index fell 3.4%, and the Dow was down just over 1,000 points over the day.
Powell and mortgage rates
Yesterday, before his speech, I wrote: " ... were [Jay Powell] to take a hawkish turn, confirming that future rate rises would continue to be aggressive, mortgage rates today might rise.”
And yet, mortgage rates fell moderately. So why was I wrong? There are two likely reasons.
First, the bond market that largely determines mortgage rates had spent seven of the previous eight business days rethinking what Mr. Powell might say. That’s why those rates had been consistently rising before Thursday.
So, his tough stance, which had recently been signaled by other top Fed officials, was less of a surprise than it would have been a couple of weeks ago. Investors may have decided they’d already more than adequately priced in the speech’s risks.
And secondly, all that liquid money that investors had acquired during Friday’s stock market meltdown had to go somewhere. They’d sold stocks. What should they do with the proceeds? It may be that the answer for many was to buy mortgage bonds, which must have looked like a safe haven. The extra demand would have pushed up prices, which would have reduced yields — and mortgage rates.
Personally, I struggle to imagine mortgage rates falling in a significant and sustained way as long as the Fed continues to push its interest rates higher. However, several experts disagree with me, predicting lower mortgage rates over the next (October — December) quarter. It’s up to you whether you believe them or me.
Economic reports next week
The blockbuster economic report next week comes on Friday. It’s August’s employment situation report, often called the “jobs report.”
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 consumer confidence index. Plus July JOLTS (job openings and labor turnover survey) and the S&P Case-Shiller US home price index for June
- Wednesday — August ADP employment report for the private sector. Sometimes seen as a bellwether for Friday’s official report
- Thursday — Second revision (of three) to productivity and unit labor costs estimates for the second quarter of 2022. Plus weekly new claims for unemployment insurance to Aug. 27. Also August sales for light motor vehicles
- Friday — August employment situation report, including nonfarm payrolls, unemployment rate and average hourly earnings
Pay attention on Friday!
Mortgage interest rates forecast for next week
One day, I’m going to resume making forecasts for the following week’s mortgage rates. But that day’s not here yet. Unfortunately, those rates remain essentially unpredictable over a seven-day period.
Toss a coin or read your horoscope. They’re about as reliable as I could 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.