Mortgage rates today, Jun. 29, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates edged upward yesterday. Overall, it’s been a quiet week. Yes, those rates are moderately higher than they were seven days ago. But the weekly change wouldn’t normally raise an eyebrow as a daily increase. So, there’s no need to panic.

Once again, mortgage rates next week are unpredictable. The monthly jobs report is due on Friday, and that has the potential to send those rates plummeting or soaring. Sadly, I have no way of knowing what it will say.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Mortgage rates ended June in better shape than they began it. But the movement over the whole month was smaller than we’ve seen on some single days this year. So, the news is good rather than great.

There’s a chance we’ll see more good months soon. But, unfortunately, I suspect the probability of seeing bad ones is, for now, similar.

With luck, we’ll have more and more consistently good months later this year. Those aren’t guaranteed but many observers expect them.

However, in the meantime, I see little point in wagering on what is effectively an evens bet. 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

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

Next week’s critical economic report

Two economic reports vie for the title of most consequential for mortgage rates (and many other things). The official monthly jobs report is one of them. And that’s scheduled for next Friday morning, Jul. 5.

The other, the consumer price index (CPI), is due on Jul. 11. So, mortgage rates could be in for an exciting time.

For those rates to fall, we’d like to see lower numbers in both reports than markets are expecting. The only exception is the unemployment rate in the jobs report. The higher that is, the better for mortgage rates (though not for the unemployed).

Next week, I’ll tell you what markets are expecting for the CPI. But I can tell you now what they expect, according to MarketWatch, from the jobs report:

• Nonfarm payrolls (new jobs created during June) — 195,000, down from May’s 272,000
• Unemployment rate — 4.0%, unchanged from May
• Hourly wages — 0.3%, down from 0.4% in May

A word of warning. Market expectations for jobs reports are frequently wildly wrong.

Such expectations are based on “analysts’ consensus forecasts.” Analysts are economists who specialize in a particular aspect of the economy, in this case, the employment market. They’re polled for their forecasts by various organizations, including MarketWatch, and an average or consensus is established.

Yesterday, the analysts who forecast the PCE price index predicted all four of the report’s components perfectly. But those who specialize in employment have a terrible record for their predictions.

Still, investors take these forecasts seriously, often adjusting their portfolios ahead of a report’s publication. So, market expectations are already baked into mortgage rates.

When those predictions are proved wrong, that can generate significant volatility as investors seek to re-adjust their portfolios to match reality.

Other economic reports next week

As is usually the case, some of next week’s reports almost never affect mortgage rates. Others sometimes move them but typically only modestly and temporarily.

Those in the latter category include purchasing managers’ indexes (PMIs). These report activity in procurement departments, which can provide real insights into how much manufacturers and service providers are gearing up to deliver. We’re due two of those on Monday and two more on Wednesday.

Other reports that can nudge mortgage rates up and down include the ADP employment report, scheduled for Wednesday. This measures only private-sector employment and is nothing like as influential as the official jobs report. But investors sometimes see it as a bellwether for the big event.

The same applies to Wednesday’s weekly tally of initial jobless claims. Investors normally recognize that, in isolation, a single week’s data is all but worthless. But the one immediately before a jobs report is occasionally taken more seriously.

Tuesday should bring May’s job openings and labor turnover survey (JOLTS). And it provides a handy peek under the labor market’s hood.

Fed events

It’s also worth noting that Federal Reserve Chair Jerome Powell has a speaking engagement next Tuesday, and Wall Street always hangs on his every word.

Also, the minutes of the last meeting of the Fed’s rate-setting committee should be published next Wednesday. The Fed’s more open than it used to be about those meetings and the minutes less frequently bring surprises. But one’s always possible.

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 — June PMIs for the manufacturing sector from S&P and the Institute for Supply Management (ISM). Also, May construction spending
• Tuesday — Fed Chair's speech. Plus May JOLTS.
• Wednesday — June ADP employment report. And two June PMIs for the services sector from S&P and the ISM. Plus May trade deficit and factory orders along with Fed minutes. Also, initial jobless claims for the week ending Jun. 29
• Thursday — No reports and markets are closed for Independence Day. Mortgage rates shouldn’t move
• Friday — June jobs report

Just as last week, Friday’s the critical day.

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

Mortgage rates forecast for next week

Once again, I must chicken out of providing a prediction about where mortgage rates will move next week. Their direction will likely pivot on Friday’s jobs report. And I have no idea what that will say.

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.