Mortgage rates today, Aug. 17, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates edged lower yesterday. We’ve seen plenty of ups and downs this week. But, overall, those rates are just a tiny bit higher this morning than they were seven days ago.

I’m hoping that mortgage rates might fall next week as volatility drains from markets and investors pause to recognize where we are economically. But that prediction is based on several assumptions that may not come to pass. So, don’t bank on anything.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

To my mind, we still have the key ingredients necessary for mortgage rates to continue to glide gently lower:

1. Inflation is below 3% and at its lowest point in 3½ years
2. The employment market has been weakening
3. As a result of the first two, the Federal Reserve is highly likely to cut general interest rates on Sep. 18

So, my personal rate lock recommendations remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

Of course, I’m not suggesting you lock on a day when mortgage rates are falling, regardless of those recommendations.

Moreover, 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.

Why not float when you’re within 15 days of closing? Well, there’s always a chance (especially right now) of a sudden, unexpected rise. And it could take 15 days for them to come back down. Of course, if you’re comfortable with that risk, float away.

What’s moving current mortgage rates

Next week

Economic reports

There are only a couple of economic reports next week that are typically capable of moving mortgage rates. And they’re both scheduled for Thursday.

They’re August purchasing managers’ indexes (PMIs) from S&P; one for the services sector and the other for manufacturing. And they’re “flashes,” too. That means they’re initial readings that are subject to later revision.

I’ll brief you on them next Wednesday so you’ll know what to expect. But don’t expect fireworks. PMIs usually move mortgage rates only a bit, and their impact typically fades within hours or days.

I guess I should also mention Thursday’s weekly jobless claims. In the past, these have barely registered; weekly data are too “noisy” (volatile) to take very seriously unless you’re following longer-term trends.

But the Federal Reserve has made clear that it’s closely monitoring all employment data. So, markets will be keeping an eye on those, too.

The Fed

Fed activities next week might help fill the vacuum left by a dearth of economic reports. Four senior officials have speaking engagements on the calendar so far, though others might join them later.

By far the most influential voice for markets is that of Fed Chair Jerome Powell. And he’s due to speak at the Jackson Hole economic symposium next Friday at 10 a.m. Eastern.

Markets are convinced that the Fed will cut general interest rates on Sep. 18. But they’re unsure how big that cut will be. Should they expect a quarter-point (25-basis-point) one or a half-point one?

They’ll be hoping Mr Powell or his colleagues will drop hints next week as to which is more likely.

A few years ago, I’d have been warning you about the publication next Wednesday of the minutes of the last meeting of the Fed’s rate-setting body, the Federal Open Market Committee (FOMC).

Time was when new FOMC minutes sometimes made a big splash in markets. But, more recently, the Fed’s been much more transparent about its thinking in advance of those minutes being released.

So, I’ll be surprised if Wednesday’s contain any shocking revelations of the sort that might move mortgage rates. Still, you can never be sure.

Summary of economic reports and events next week

See above for details about the more important economic reports next week. Any abbreviations or technical terms below are also explained there.

In the following list of next week’s reports, only those in bold typically have the potential to affect mortgage rates appreciably. The others probably won’t have much impact unless they contain shockingly good or bad data.

• Monday — July leading economic indicators. Fed Governor Christopher Waller speaks
• Tuesday — Atlanta Fed President Raphael Bostic and Fed Vice Chair for Supervision Michael Barr have speaking engagements
• Wednesday — Fed rate-setting committee minutes
• Thursday — August flash PMIs from S&P for the services and manufacturing sectors. Also, initial jobless claims for the week ending Aug. 17. And July existing home sales
• Friday — Fed Chair Jerome Powell's speech at Jackson Hole. Plus July new home sales

Thursday and Friday are the days to watch out for.

Time to make a move? Let us find the right mortgage for you

Mortgage rates forecast for next week

With luck, mortgage rates might move a little lower next week. But that prediction has more to do with my sunny optimism (!) than rational analysis.

Don’t take these weekly predictions too seriously. It’s much easier to make daily and long-term ones.

How your mortgage interest rate is determined

A bond market generally determines mortgage and refinance rates. It’s the one where trading in mortgage-backed securities takes place.

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 something called you “PITI.” That stands for:

• Principal — Pays down the amount you borrowed
• Interest — The price of borrowing
• Taxes — Specifically property taxes
• Insurance — Specifically 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 rate 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 2023

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.