Today’s mortgage and refinance rates
Average mortgage rates fell modestly yesterday. Indeed, they fell over the whole of this week, though appreciably rather than modestly. So they’re in pretty good shape compared only to how bad they might have been.
I’ve still no forecast for next week, I’m afraid. But we should know a lot more next Tuesday when the consumer price index is published. That’s likely to largely determine the size of the Federal Reserve’s rate hike on Sep. 21. So that could be a tipping point for mortgage rates.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||6.222%||6.255%||+0.05%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||5.301%||5.332%||+0.03%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||6.161%||6.221%||-0.04%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||5.727%||5.844%||+0.05%|
|30 year fixed FHA|
|30 year fixed FHA||6.086%||7.003%||+0.11%|
|15 year fixed FHA|
|15 year fixed FHA||5.716%||6.323%||+0.15%|
|30 year fixed VA|
|30 year fixed VA||6.017%||6.255%||+0.25%|
|15 year fixed VA|
|15 year fixed VA||5.75%||6.104%||+0.05%|
|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.
Even if September turns out to be an OK month for mortgage rates — and that’s far from certain — I’d be surprised if we were to see significant and sustained falls. After that, is anyone’s guess. But I suspect gentle rises are more likely than falls overall between now and the end of the year.
So, 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
Next Tuesday could be a pivotal day for mortgage rates. That’s when the latest inflation figures are released in the form of the consumer price index (CPI).
Mortgage rates have risen sharply this year for two main reasons. First, inflation itself tends to push them higher. And, secondly, the Federal Reserve tries to drive inflation down by hiking general interest rates.
Tuesday’s CPI will influence both of those. If inflation is showing early signs of cooling, the Fed might decide on a 50-basis-point (0.5%) hike on Sep. 21. But if it’s still running hot, that rise is more likely to be 75 basis points (0.75%).
Of course, if the CPI figures come in as expected, markets and mortgage rates might barely react. To be clear, those rates are likely to rise if inflation is still heading higher and drop if it’s falling.
The rest of 2022
I used to talk often about an epic struggle in investors’ minds between a fear of inflation and a dread of recession. And that’s still going on.
When inflation preoccupies investors, mortgage rates tend to rise. But when they’re obsessed with a future recession, those rates tend to fall.
The tussle between the two will likely continue until prices stabilize and an economic downturn either arrives or clearly isn’t going to.
So far, the signs of an imminent US recession are limited. Employment numbers, purchasing managers’ indexes and other economic indicators are too strong for a downturn to come soon.
But that could change quickly. A recession in Europe seems all but inevitable. And it’s a risk in other important economies, even China. In today’s globalized world, such woes might easily infect the US economy.
Meanwhile, inflation continues in many commodities, though energy prices have been stabilizing, especially in America. And higher food prices are a problem virtually everywhere. We’re still some distance from a vicious spiral in which wages chase prices and prices chase wages. But that’s always another risk.
So what does all this mean for mortgage rates over the next few months? Well, anything could happen. But I reckon they’re more likely to gently rise than fall. Even if inflation suddenly cools, the Fed has said it will want to see evidence of that over “several months” before it eases off its interest rate hikes.
But this is a balance-of-probabilities judgment. Nobody knows for sure.
Economic reports next week
Next week is almost all about inflation. Tuesday’s CPI (see above) will tell us about consumer prices in August. And Wednesday’s producer price index and Thursday’s import price index measure future prices coming down the pipeline.
The week may be inflation-heavy, but there are a couple of other types of reports, too. Thursday’s retail sales for August will give hints about how the economy’s holding up. And Friday’s consumer sentiment index and 5-year consumer inflation expectations reports will give all-important insights into Americans’ hopes and fears for the economy.
In the following list, key reports are in bold. Others next week are unlikely to move markets or mortgage rates much unless they contain shockingly good or bad data.
- Monday — New York Fed 3-year inflation expectations
- Tuesday — August consumer price index. Plus National Federation of Independent Businesses small business index
- Wednesday — August producer price index
- Thursday — August retail sales. Plus August import price index, and industrial production index. Weekly new claims for unemployment insurance to Sep. 10.
- Friday — Consumer sentiment index and 5-year consumer inflation expectations from the University of Michigan
It’s a big week for economic data.
Mortgage interest rates forecast for next week
I haven’t a clue what will happen to mortgage rates next week. A mountain of economic data could push them either way. See above for my longer-term forecast.
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.