Mortgage and refinance rates today, Nov. 26, and rate forecast for next week

Today’s mortgage and refinance rates

Average mortgage rates barely moved yesterday. Indeed, they’ve been unusually stable by recent standards ever since Nov. 10.

Those rates could move either way next week. Because that Thursday brings another important inflation report. And the direction mortgage rates take will depend on its content.

Current mortgage and refinance rates

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.

There aren’t any guarantees with mortgage rates. I think there’s a good chance they’ll head higher again soon. But further falls aren’t out of the question. So much depends on what the next two key inflation reports say and how big the Federal Reserve’s next rate hike is. (Dates for those below.)

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

If you want to catch up on how mortgage rates got to where they are now, read last week’s weekend edition of this report. Little has changed since then.

Briefly, mortgage rates plunged by an extraordinary amount on Nov. 10. That was a direct result of a single better-than-expected inflation report, the consumer price index (CPI) for October.

Inflation

Despite my fears — and countless warnings from the Federal Reserve and financial media — markets have so far stuck with their decision to bet heavily on that single report. And, next week, their decision to do so may be partly validated (mortgage rates might fall) or invalidated (they might rise) by the next inflation report.

Because next Thursday brings the publication of the personal consumption expenditures (PCE) report’s price index. And that pretty much ties with the CPI in importance, largely because it’s the one the Fed relies on most.

If the PCE confirms that inflation is cooling, the Fed may hike its rate by only 50 basis points (0.5%) on Dec. 14. But, if it suggests the last CPI was an outlier and that inflation is still hot, we might see a 0.75% hike. (The next CPI report, which comes out on Dec. 13, will also be critical.)

More immediately, next Thursday could trigger more volatility in mortgage rates. To be clear, they’re likely to rise if the PCE price index shows inflation still rising or fall if it shows prices dropping.

Employment

Often the employment situation report is the most important of all monthly economic reports. But, understandably, it’s recently taken a back seat to inflation ones.

Still the next one, due Friday, might still be influential. Counterintuitively, both the Fed and markets would like to see unemployment rise (good for mortgage rates).

That’s because it would suggest that the Fed’s bitter anti-inflation medicine is working. And that might take some pressure off the central bank to keep hiking interest rates so aggressively.

The Fed rules

Right now, pretty much all economic reports are viewed through the prism of how the Fed will react to them. Markets generally — including the bond market that largely determines mortgage rates — are desperate for a quick return to the cheap-money environment that gave them exceptionally high returns for a decade or so.

There’s much talk among investors of the Fed “pivoting,” meaning reversing course and beginning to cut interest rates. But some seem to have a wildly optimistic view of when that might happen.

Because the Fed has repeatedly made clear that it intends to continue to hike rates at least through the first three months of 2023. And that it will do that regardless of how good economic data turn out to be.

Might it bend and pivot earlier? Of course, that’s possible. But I doubt it.

And, if I’m right, I reckon mortgage rates are more likely to rise than fall over the next few months.

Economic reports next week

This week has been a slow one for economic reports. But next week has plenty. I already discussed the really critical ones, above.

Those are shown below in bold. The others could still move mortgage rates. But probably only if they reveal shockingly good or bad data.

• Tuesday — November consumer confidence index. Plus home price indexes from S&P Case-Shiller and the Federal Housing Finance Agency
• Wednesday — October’s job openings and labor turnover survey (JOLTS). Plus the ADP private-sector employment report for November. Also, the second reading of gross domestic product during the third quarter
• Thursday — October personal consumption expenditures (PCE) report, including price index. Plus manufacturing indexes from S&P and the Institute for Supply Management. Also, initial jobless claims for the week ending Nov. 26
• Friday — November employment situation report, including new jobs (“nonfarm payrolls”), unemployment rate and average hourly earnings

Thursday and Friday are the days to watch.

Mortgage interest rates forecast for next week

Yet again, mortgage rates could go either way over the coming seven days. Barring earth-shattering events, their direction will likely be set by next week’s inflation and employment reports.

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.

Your part

But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:

1. Shopping around for your best mortgage rate — They vary widely from lender to lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
5. 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.