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

Today’s mortgage rates

Average mortgage rates edged modestly downward yesterday. But the week as a whole was excellent. There wasn’t a single rise over the last seven days. And those rates closed yesterday at their lowest level for four months.

Mortgage rates next week might move a little lower. But there’s plenty that might go wrong with that prediction. Read on to discover what.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Last week, I wrote, “Might this mean that [mortgage] rates have embarked on their much-anticipated, sustainable downward trend? It’s possible. But I doubt it.”

Well, I’m still uncertain. But many of my doubts have disappeared. We may well be witnessing the start of that downward trend. And I’m hoping to soon change my personal rate lock recommendations.

Still, I’m always very cautious about what the future will bring. So, for now, those 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

Of course, I’m not suggesting you lock on a day when mortgage rates are falling. There will likely be plenty of days and longer periods when the outlook for those rates is positive. By all means, take advantage of those.

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.

What’s moving current mortgage rates

What happened

Mortgage rates have tumbled since Jul. 2 for three main reasons:

1. Federal Reserve Chair Jerome Powell said recent data on inflation and employment might help the Fed cut general interest rates sooner than many feared
2. The June jobs report showed a tightening in the labor market
3. Thursday’s consumer price index (CPI) showed inflation cooling faster than markets expected

Those three make up the Holy Grail of lower mortgage rates.

Might things yet go wrong? Of course.

We might get a poor inflation report on Jul. 26. The Fed’s rate-setting committee could be more downbeat than we expect when it meets on Jul. 31. The July jobs report, due in the first week of August, might show the labor market rebounding. But, for now, the outlook for mortgage rates is more positive than it’s been in the last three years or so.

It’s still pretty unlikely that the Fed will cut general interest rates on Jul. 31. But it may well signal that day that, all being well, it’s expecting to make such a cut on Sep. 18. And that should be enough to send mortgage rates even lower.

Next week’s important economic events

Fed Chair Powell is scheduled to make a speech at noon next Monday. Markets will be keen to hear his take on Thursday’s CPI.

They’ll be hoping he says that the inflation report makes a September cut in general interest rates more likely. Mortgage rates might fall if he does but rise if he doesn’t.

Other senior Fed officials have speaking engagements on Tuesday and Friday of next week. Their words don’t carry as much weight as Mr. Powell’s but they still might affect mortgage rates.

Next week’s big economic report lands on Tuesday and covers retail sales in June. Markets are expecting those to decline to -0.2% from May’s 0.1%. For lower mortgage rates, we’d like an even lower number.

Also on Tuesday, we’re due the June import price index (IPI). For mortgage rates, that’s the least consequential of the price indexes. And, given that markets shrugged off yesterday’s disappointing producer price index, which is typically more consequential, we can hope they ignore the IPI, too.

Wednesday’s calendar includes June industrial production and capacity utilization. Markets are expecting those to decline, and we’d like them to be even worse than those expectations.

As usual, I’ll brief you more fully on next week’s key reports on the day before each is published.

Summary of economic reports and events next week

See above for details about the more important economic reports next week. Any abbreviations 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 — Fed chair's speech. Plus July Empire State manufacturing survey
• Tuesday — June retail sales. Plus June import price index. Also May business inventories, July homebuilder confidence index, and a speech by Fed Governor Adriana Kugler
• Wednesday — June industrial production and capacity utilization. Plus June housing starts and building permits
• Thursday — June leading economic indicators. Plus July’s Philadelphia Fed manufacturing survey. Also, initial jobless claims for the week ending Jul. 13
• Friday — Speeches from two senior Fed officials, New York Fed President John C. Williams and Atlanta Fed President Raphael Bostic

Monday and Tuesday are next week’s crucial days for pain or gain for mortgage rates.

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

Mortgage rates forecast for next week

I’m sticking my neck out and predicting a mildly good week for mortgage rates. But plenty could mess up that prediction.

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.