Mortgage rates today, Feb. 24, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell this week following a moderate drop yesterday. However, the improvement was small.

The fact that my prediction was right last week was more down to luck than judgment. And we’re due some consequential (and unpredictable) economic reports over the next seven days. So, I’m going to say that mortgage rates next week could go either way. Sorry, but that’s reality.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Yes, I still think mortgage rates will fall over 2024. But it’s looking as if we’ll likely have to wait until late spring or early summer for a sustained downward trend to emerge.

So, my personal rate lock recommendations are now:

• 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 week’s GDP report

This week, the mood music in markets was the main driver of changes in mortgage rates. Bond investors were relatively cheerful.

However, next week does contain a couple of potentially consequential economic reports that could improve or worsen that mood, depending on what they say. And the first of those lands next Wednesday.

That’s the second (of three) readings of gross domestic product (GDP) in the last quarter of 2023 (Q4/23). Right now, markets are expecting that to be the same as the first reading: 3.3%. If the actual figure is noticeably lower than that, mortgage rates might fall on Wednesday. However, if it’s higher, those rates could rise.

Next week’s inflation report

The other potentially important report is due Thursday and is the personal consumption expenditures (PCE) price index for January. This is the Federal Reserve’s preferred gauge of inflation and will likely play a key role in its upcoming decisions on future cuts to general interest rates.

And, while the Fed doesn’t directly control mortgage rates, its likely treatment of general interest rates influences them enormously. So next Thursday’s report could be highly consequential.

The Fed tends to focus on “core” inflation, which is the all-items price index after volatile food and energy prices have been stripped out. This is seen as revealing underlying inflation.

Markets are expecting core PCE inflation to have warmed in January itself to 0.4% from December’s 0.2% and to have cooled to 2.8% from 2.9% in December over the previous 12 months. If Thursday’s figures prove those forecasts to be correct, mortgage rates may barely move because those numbers are already priced in.

However, higher-than-expected figures could push mortgage rates upward. And lower-than-expected ones might drag them downward.

Other reports next week

Those two economic reports aren’t the only ones on next week’s calendar. But they are the ones most likely to move mortgage rates.

Most of the others tend to pass mortgage rates by unnoticed. And the few that sometimes make a difference tend to have only small and temporary effects — unless they contain truly shocking data. Those include consumer confidence on Tuesday and consumer sentiment on Friday. Also, a couple of purchasing managers’ indexes for the manufacturing sector on Friday.

Senior Fed officials have eight speaking engagements this week, all on Thursday and Friday, and markets will listen out for those. But the speakers would have to say something unexpected to affect mortgage rates. Of course, they might. But I doubt it.

Economic reports next week

See above for details about the more important economic reports next week.

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 — January new home sales
• Tuesday — February consumer confidence. Also durable goods orders and the S&P Case-Shiller home price index, both for January
• Wednesday — Q4/23 gross domestic product, second reading
• Thursday — January PCE price index. Plus January pending home sales. And initial jobless claims for the week ending Feb. 24
• Friday — February PMIs for the manufacturing sector from the ISM and S&P. Also, January construction spending and February consumer sentiment.

We’re most likely to see sharp movements in mortgage rates on Wednesday and Thursday.

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

Mortgage rates forecast for next week

Mortgage rates are unpredictable next week. Nobody knows what the two potentially consequential economic reports due over the next seven days will say. And there’s no point in my pretending I do.

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.