Today’s mortgage and refinance rates
Average mortgage rates have barely moved since last Thursday’s exceptional tumble.
I’m surprised mortgage rates haven’t already bounced higher, which may be a sign of how limited my powers of prediction are. But I suspect those rates are more likely to rise than fall in the coming days and weeks. Still, the next seven days may be quiet for mortgage rates. Just read on for the bigger picture.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||6.873%||6.903%||-0.05%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||5.903%||5.933%||-0.06%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||6.747%||6.792%||-0.03%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||6.497%||6.603%||+0.12%|
|30 year fixed FHA|
|30 year fixed FHA||6.409%||7.188%||+0.02%|
|15 year fixed FHA|
|15 year fixed FHA||6.084%||6.613%||-0.03%|
|30 year fixed VA|
|30 year fixed VA||6.216%||6.446%||-0.06%|
|15 year fixed VA|
|15 year fixed VA||6.282%||6.642%||-0.09%|
|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.
With mortgage rates close to a two-month low — having tumbled from close to a two-decade high — they’re attractive right now. And, if you haven’t locked your rate already, you might want to consider doing so now. Of course, these rates might fall yet further. But I reckon that’s less likely than their moving higher.
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
Last Thursday’s extraordinary fall in mortgage rates was triggered by a single event. And that was the publication of October’s consumer price index report, which suggested that inflation is beginning to cool.
To me and many economists and analysts, markets responded with an irrational level of euphoria. Mortgage rates would likely have fallen moderately on the news anyway. Investors hate inflation.
But markets seemed to think a single month’s “glimmers of hope” (in The New York Times’s words) would make the Federal Reserve revisit its current rate-hiking policy. Indeed, some even appeared to believe the Fed would “pivot,” meaning it would soon U-turn and start cutting rates again.
This was never going to happen. And, ever since the CPI report, a parade of Fed officials have made public statements saying as much. Meanwhile, many commentators across the financial media have been reinforcing that message.
The Fed and mortgage rates
And yet mortgage rates have barely budged from their two-month low set last Thursday. Investors seem to be sticking their fingers in their ears while chanting la-la-la.
All week, I’ve been expecting mortgage rates to rise as investors finally get the message. But that hasn’t happened — at least yet.
I should be less surprised by this than I have been. Markets are at least as subject to herd instincts as they are to the wisdom of crowds.
And it’s possible investors will turn out to be right to hold out. More major inflation reports are due out on Dec. 1 (personal consumption expenditures (PCE)) and Dec. 13 (November’s CPI). And, if they show that last Thursday’s CPI report was not just a flash in the pan, mortgage rates might stay low or even drop further.
We’re due next Wednesday the minutes of the Fed’s monetary policy group, the Federal Open Market Committee (FOMC). Those are likely to show the Fed determined to stick to its rate-hiking guns.
But the FOMC meets again next month and will issue a report and host a news conference on Dec. 14. It’s almost certain the Fed will hike rates again that day. But whether that’s a 50-basis-point (0.5%) increase or another 75-basis-point (0.75%) one will depend on how consistent and compelling those inflation reports have been.
We’ll also get a “dot plot” (a graphical representation of where each FOMC member expects rates to be in future months) that day. And expect that to be hugely influential on mortgage rates.
Better news ahead?
In his weekly e-newsletter for The New York Times yesterday, economist Paul Krugman made a persuasive case for a return to low interest rates fairly soon. Under the headline, “Why interest rates (probably) won’t stay high,” he explored the conditions that drive rates higher or lower and concluded:
What all this suggests to me is that the era of cheap money is not, in fact, over. A few years from now, we’ll probably be back to a situation in which too much saving is chasing too few investment opportunities, and interest rates will be revisiting their old lows.
A few years must seem ages if you feel you’re currently locked out of the housing market. But it’s good to know there’s (probably) light at the end of the tunnel. So, keep saving for your down payment! Your time will come.
Economic reports next week
Thanksgiving makes next week a strange one for economic reports. Pretty much every important one lands on that Wednesday. I say “important” but none of them is likely to move mortgage rates far unless they contain shockingly good or bad data.
- Wednesday — November consumer sentiment index, and purchasing managers’ indexes from S&P for the services and manufacturing sectors. Plus October data for new home sales, durable goods orders, and core capital equipment orders. Also, initial jobless claims for the week ending Nov. 19
- Thursday — Markets closed for Thanksgiving Day
Next week’s economic reports might extend our current break from mortgage-rate volatility. But, of course, geopolitical factors could still whip up a storm. And markets just might take their collective fingers out of their ears.
Mortgage interest rates forecast for next week
We may have another quiet week next week with mortgage rates barely moving. But you can never be sure of that.
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:
Down payment assistance programs in every state for 2021
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.