Mortgage rates today, Jul. 22, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates edged lower yesterday. Unfortunately, that wasn’t representative of a week that saw those rates nudge higher.

There’s plenty on next week’s economic calendar that could move mortgage rates higher or lower. That makes any prediction more difficult than usual. Still, at little more than a guess, I reckon mortgage rates might nudge higher again over the next seven days.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

I still can’t summon much optimism about the prospects for mortgage rates over the coming months. The economy remains too strong, consumers are too confident, and we’ll almost certainly see the Federal Reserve hike general interest rates next Wednesday.

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

Markets seem worried about next week’s economic events. That’s probably why mortgage rates rose this week.

They could move either way next week when those events occur, depending on what the Federal Reserve and three or four economic reports say.

I’m guessing those rates might move higher mostly because I assume markets had reason to be worried this week. But those markets are at least as likely to be capricious as correct. So, we’ll just have to wait to see how events unfold.

A rate hike next Wednesday?

It’s virtually certain that the Federal Reserve will increase general interest rates by 25 basis points (0.25%) next Wednesday afternoon. The CME FedWatch tool puts the probability at 99.8%.

What’s less predictable is what Fed Chair Jerome Powell will say when he hosts a Wednesday news conference at 2:30 p.m. (ET). Will he hint that he expects that day’s hike to be the last this year? If so, that would likely pull mortgage rates lower. Or will he suggest that more hikes are on the cards, probably pushing those rates higher?

It’s unlikely Wednesday’s hike itself will move mortgage rates much — unless there isn’t one at all or it’s bigger than expected. Markets have already priced in a 0.25% increase.

The economy

Mortgage rates might fall moderately if economic reports next week show the economy slowing appreciably. But economists are expecting continuing growth if at a slightly slower pace.

The big indication will be next Thursday, which brings the first of three readings of gross domestic product (GDP) during the second quarter of this year. And analysts (specialist economists) are forecasting 1.7% growth over that period, down from a surprisingly high 2% in the first quarter.

Two less important reports land next Monday. They’re July purchasing managers’ indexes (PMIs) from S&P.

Analysts are forecasting that the PMI for the manufacturing sector will be a little stronger than in July while that for the services sector will be similarly weaker. They just might cancel each other out.

Inflation

Inflation is the hot topic right now. And next Friday brings one of two crucial monthly reports that track it.

We’ve already had the more famous: the consumer price index (CPI). Next week’s is the personal consumption expenditures (PCE) price index for June.

That’s still important because it’s the Fed’s preferred gauge of inflation. And analysts predict it will rise a little. However, they expect “core” (excluding food and energy prices) PCE to tick lower.

Economic reports next week

I’ve already covered in the previous sections the main economic reports and activities scheduled for next week.

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

• Monday — July PMIs for the services and manufacturing sectors from S&P
• Tuesday — May home price index from S&P Case-Shiller. Plus July consumer confidence index
• Wednesday — Fed rate announcement and news conference. Plus new home sales in June
• Thursday — GDP for the second quarter. And durable goods orders in June. Plus new jobless claims for the week ending Jul. 22
• Friday — June PCE price index and personal income and spending. Plus the employment cost index for the second quarter and the final consumer sentiment index for July.

This week was a quiet one for reports. Next week will be the opposite.

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

Mortgage interest rates forecast for next week

Markets seem to think next week might be more difficult than expected. And, on that basis, I’m predicting that mortgage rates next week might nudge higher.

But I don’t have high confidence in that prediction. And, really, we’ll have to wait to see how things turn out.

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 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.