Mortgage rates today, Jan. 13, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates edged moderately lower yesterday. That meant they ended yesterday lower than they were a week earlier. Indeed, they’re at their lowest so far this month.

Mortgage rates might fall modestly again next week. But that prediction could be spoiled if Wednesday’s retail sales data turn out to be particularly strong. Or if some geo-political flashpoint (currently, the Middle East and Taiwan appear particularly critical) blows up.

Bond markets will be closed on Monday for Martin Luther King Day. As a result, mortgage rates shouldn't move. So, we'll be having a day off.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Mortgage rates resumed their gentle fall this week. We can’t be sure that the previous week’s rises were a brief blip within a downward trend. But it’s looking increasingly likely.

So, I retain my hope that mortgage rates will slowly glide lower through 2024. But, even if I’m right, we can expect some turbulence during the descent.

Of course, I’m giving you my view of the most likely scenario. And events could overtake that.

Anyway, my personal rate lock recommendations are:

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

Recently

Normally, markets are reasonably predictable. Data that show a stronger-than-expected economy or a higher-than-expected inflation rate tend to push mortgage rates higher.

But that hasn’t happened for either of the two most recent blockbuster economic reports. Last week’s jobs report showed unexpected resilience in the labor market. And mortgage rates inched lower.

This Thursday’s consumer price index (CPI) showed inflation running slightly warmer than expected. And mortgage rates fell.

So, what’s happening? Well, my guess is that investors have so strongly bought into the narrative of a “soft landing” (when inflation keeps falling even when the economy’s strong) that they’re prepared to ride out occasional data that contradicts their belief.

Of course, if the data consistently contradicted that narrative over multiple months, markets would likely be forced to change their collective minds. But, in the meantime, mortgage rates might continue to benefit from markets’ benign sentiment.

Next week

Stand by for an episode of déjà-vu. Just like last week, next week starts very slowly for mortgage rates then delivers the only really big economic report midweek.

Markets are closed on Monday and no economic reports are scheduled for Tuesday. Then Wednesday brings a small avalanche of such reports.

The big one is the retail sales report for December. According to MarketWatch, Wall Street is expecting those to inch higher, rising by 0.4% in December compared with 0.3% in November.

Normally, I’d tell you that a higher-than-expected figure could push mortgage rates higher, a lower one could drag them down, and an on-forecast one leave them barely touched. But if markets are shrugging off the jobs report and the CPI then they may well do the same for retail sales and other less consequential reports.

The other reports scheduled next week rarely move mortgage rates far. It’s not impossible they will this time, but pretty unlikely.

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 — Markets closed for Martin Luther King Day
• Tuesday — Nothing
• Wednesday — December retail sales. Plus December import price index (IPI). Also, industrial production and capacity utilization in December, and business inventories for November
• Thursday — December housing starts and building permits. Plus new claims for unemployment benefits for the week ending Jan. 13
• Friday — January consumer sentiment. And December existing home sales

Watch out for Wednesday!

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

Mortgage rates forecast for next week

I'm hoping that mortgage rates next week could edge lower. But that’s based on general market sentiment and a retail sales report that comes in close to forecasts. If the first U-turns or the second is much stronger than expected, rises are possible.

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.