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

Today’s mortgage rates

Average mortgage rates barely moved yesterday. Indeed, they’ve barely moved all week, closing last night almost imperceptibly lower than seven days earlier. So far in June, they’ve fallen moderately.

Mortgage rates next week are unpredictable. We have an important inflation report due next Friday that could push them either way.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

So far, June has been relatively benign for mortgage rates. And there’s a good chance the month will end on a happy note. But we’ve two crucial economic reports between now and then. So, this is no time to be counting chickens.

Further ahead, I remain pessimistic about a sustained downward trend emerging for these rates until much later in the year, if then.

True, I mentioned during the week a glimmer of hope. Retail investors are becoming increasingly attracted to bonds. And, if enough start buying mortgage-backed securities, that could drive those bonds’ yields down, taking mortgage rates with them.

But it’s much too soon to rely on that helping. So, my overall, 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

The big picture

It’s easy to be distracted by big rises and falls in mortgage rates and assume that something interesting is happening. But that’s often not the case.

To see sustained falls in mortgage rates, we need at least two of three things:

1. Slowing inflation that’s getting close to the Federal Reserve’s target of 2% a year
2. Signs that the economy is cooling, especially with regards to employment
3. The Fed to signal that it soon intends to cut general interest rates

Recent inflation data have been good. But, as we’ve drawn closer to the 2% target (“the last mile,” as the Fed calls it), figures have been going up and down in different months. And we’re still a way off a clearly defined slowing trend.

Meanwhile, the employment market has remained remarkably resilient. Economists keep forecasting rapid falls in newly created jobs but those falls stubbornly refuse to materialize.

Finally, we come to the Fed. It doesn’t want to cut general interest rates yet for two reasons. First, it hiked rates in the first place to rein in inflation and it remains to be convinced that will fall to its 2% target quickly. And, secondly, it fears an overheating economy, which could create new inflation. And monthly employment reports keep showing that the economy is still running warm.

This is why I remain pessimistic about mortgage rates having entered a sustained downward trend. And it’s why I suspect we won’t see one of those until much later in the year, or perhaps in 2025.

It’s important to be realistic about what such a downward trend will look like. Very few economists expect mortgage rates to tumble back into the 4% or even 5% range in the foreseeable future.

Most reckon they could end the year at 6.x%. For example, Fannie Mae published its June forecast yesterday, and it’s expecting those rates to average 6.7% in the last quarter of 2024 (a gain, but a modest one), and to have gently fallen to 6.3% by the fourth quarter of 2025, one year later.

Next week’s critical economic reports

Only one of next week’s economic reports is truly critical. And that’s the personal consumption expenditures (PCE) price index, which measures inflation.

Markets take this seriously but less so than the more famous consumer price index (CPI). However, the Fed says the PCE price index is its favored gauge of inflation. So, it’s pretty important.

Like the CPI, the PCE index is broken down into four components, two each for the reported month (May in this case) and two for the year-over-year (YOY) period (in this case, Jun. 1, 2023 to May 31, 2024).

The monthly and YOY figures each come in two flavors. The main index measures all prices in the survey. And the “core” PCE index measures those after excluding volatile food and energy prices.

As always with inflation reports, we’re most likely to see mortgage rates fall if the figures are below those that markets are expecting. And markets are expecting:

• May PCE index — 0.0% expected, down from 0.3% in April
• YOY PCE index — 2.6% expected, down from 2.7% in April
• May core PCE index — 0.1% expected, down from 0.2% in April
• YOY core PCE index — 2.6% expected, down from 2.8% in April

If achieved, those numbers themselves should be cause for celebration in markets. But we’d like to see even lower ones.

Other potentially influential reports next week

As usual, most of next week’s reports are unlikely to influence mortgage rates perceptibly. But the following might create limited and temporary movements:

• May consumer confidence index (Tuesday)
• Final reading of gross domestic product growth in first quarter of 2024 (Thursday)
• June consumer sentiment index (Friday)

Yes, any report can move mortgage rates if it contains sufficiently shocking data. But, besides the PCE index, those three are the ones that most often have some small effect.

I’ll brief you on each of those reports the day before it is scheduled for publication.

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 — Nothing
• Tuesday — April S&P Case-Shiller home price index. And May consumer confidence index
• Wednesday — May new home sales
• Thursday — Final reading of Q1 GDP. Plus May durable goods orders. And May pending home sales. Also, initial jobless claims for the week ending Jun. 22
• Friday — May PCE price index. And other PCE data. Also, the Chicago business barometer and consumer sentiment index, both for June.

Watch out for Friday!

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

Mortgage rates forecast for next week

The direction rates take next week will probably hinge on Friday’s important inflation report. Naturally, I don’t know what that will say. So, I can’t make any prediction for the coming seven days.

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.