Mortgage rates today, Nov. 4, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates tumbled yesterday. That was the fourth consecutive day of falls, three of which were significant drops. If only every week were like this one.

I’m hoping that mortgage rates next week might continue falling. Markets seem in the mood to keep them heading lower. And there’s a new narrative that investors are buying into. But note that sharp movements in mortgage rates in one direction are often followed by less sharp ones in the other. So, don’t be surprised if there are some rises.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Having checked its archive, Mortgage News Daily proclaimed this week as one of the Top 3 for mortgage rates in well over a decade. But we must remember that we’ve seen only four days of falls. And that’s way too short a period for us to start talking about new trends.

It’s more likely today that we could soon see a sustained and significant downward trend than it was last Saturday. But I’m not ready to change my call that any such trend will probably arrive only in 2024.

So, for now, 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

This week

It was always possible that mortgage rates would fall appreciably this week. But I’ve been surprised by the sheer scale of the drop.

The Fed and a new narrative

The serious falls started on Wednesday, following a news conference that afternoon hosted by Federal Reserve Chair Jerome Powell. Mr. Powell didn’t actually say anything new.

But Wall Street divined from his words a whole new scenario for general interest rates. On Thursday, I quoted a senior trader who told The Wall Street Journal (paywall): “They want to maintain a hawkish facade while believing deep down that they’ve probably done enough [to drive inflation down to 2%].”

So, the new narrative behind this week’s big falls in mortgage rates, derived from a claimed understanding of what the Fed believes “deep down,” is that the Fed has quit hiking general interest rates and will soon be contemplating cuts.

Actually, that may turn out to be true. But it depends entirely on the data contained in future reports on inflation and the wider economy.

Employment

Luckily for those who prefer the Fed’s deep-down feelings to its words, the first blockbuster report following the news conference was Friday’s jobs report. That showed the employment market losing steam.

And it could, indeed, help the Fed to continue its pause on rate hikes. Many more reports like that and the central bank really might abandon any thoughts of future hikes in general interest rates.

However, several other, less important, economic reports this week (and in recent weeks) suggest the economy is still some way off a recession. And one of those remains the best hope for those who want lower mortgage rates over a sustained period.

Next week

None of the economic reports scheduled for next week typically moves mortgage rates far — or, indeed, at all. So, it’s unlikely any changes in those rates will be down to new data.

Mostly, it will be down to whether investors continue to embrace the new narrative about no new rate hikes (falling mortgage rates) or whether they begin to question it (rising ones).

Top Fed officials share eight speaking engagements next week, including two featuring Mr. Powell. And those could significantly influence how investors perceive what the Fed feels deep down.

Economic reports next week

As I said in the last section, none of next week’s economic reports is likely to move mortgage rates. I guess one of them could if it were spectacular enough. But they typically don’t even cause a ripple.

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

• Tuesday — September trade deficit. Plus consumer credit that month
• Wednesday — September wholesale inventories
• Thursday — Initial claims for jobless benefits for the week ending Nov. 4
• Friday — Veterans Day. No reports but markets remain open

Watch out for Fed speakers on every day except Friday.

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

Mortgage rates forecast for next week

Markets seem invested in the new narrative (see above) about the future of general interest rates. And, if that continues, we may well see mortgage rates falling next week. I see that as the more likely scenario.

But I’m fairly skeptical about that narrative, which seems to me to be based on optimism rather than realism. If the same feeling, deep down, strikes enough investors, there’s a possibility of higher mortgage rates next week.

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.