Mortgage rates today, Nov. 25, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates were close to unchanged yesterday. And that was good news. Because mortgage rates closed yesterday evening just a shade lower than they did the previous Friday.

Just as I was seven days ago, I’m hoping mortgage rates might not move too far next week. However, there are a few economic reports and events on the calendar that could undermine my analysis. So, as ever, don’t take these weekly predictions too seriously.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Nothing’s changed since I wrote the following last week:

The possibility of a sustained and significant downward trend in mortgage rates is growing. With both inflation and the economy cooling, we’re beginning to see space for those rates to fall.

What remains unclear is when that could happen. We’ve had periods this year when mortgage rates fell farther and for longer than they so far have in the current dip. But they soon resumed their climb.

I’m hoping to revise them, perhaps within weeks, but, 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

Next week

I shouldn’t be surprised if next week were to be another quiet one for mortgage rates. But there are a few economic reports and events that just might overturn my expectations. So, let’s run through those.

Fed speakers

Top Federal Reserve officials share nine speaking engagements next week. If enough are sufficiently optimistic or pessimistic about the future of general interest rates, that could affect mortgage rates.

One of those officials is Fed Chair Jerome Powell, who will be speaking next Friday. He is by far the most influential of all the speakers and certainly has the ability to move mortgage rates. Indeed, over the last few weeks, his words have triggered a sharp fall and similar rise in those rates.

Right now, the official Fed line is that it reserves [sic] the right to hike general interest rates further if the economic data demand it. But it’s not even speculating about when the first rate cuts might happen.

Markets reckon that, regardless of what it says, the Fed is done hiking. They believe the data will continue to justify holding those rates steady and hope for rate cuts during the first half of 2024.

Markets may turn out to be right on both counts. But they’re betting big on future and uncertain data. And, if the numbers don’t meet their expectations, mortgage rates could rise sharply.

Economic reports

Inflation

Probably the most important economic report next week will be October’s inflation report, which is due on Thursday. And it’s not just any inflation report. The personal consumption expenditures (PCE) price index is the one the Fed relies on most when deciding its policy on general interest rates.

The core PCE price index excludes volatile food and energy prices, but it’s the one economists prefer over the one that includes all items. Markets are expecting that to show price rises slowing again: to 0.2% in October compared to 0.3% in September. They also think the year-over-year core figure will fall: to 3.5% from September’s 3.7%.

Market expectations are hugely important to how economic reports affect mortgage rates. Investors tend to trade ahead of each report’s publication based on those expectations, which are formally called “analysts’ consensus forecasts.”

For mortgage rates to fall, we want to see price rises slowing in next Thursday’s report even more than forecast. For non-inflation economic reports, we’ll hope for the economy to be doing worse than expected.

GDP

And that brings us neatly to Wednesday’s GDP report for the third quarter of this year (Q3/23). These reports start with an initial estimate that is refined in two subsequent monthly revisions. Wednesday brings the second of those three reports so there is one more revision to come.

Markets are expecting no change between the first estimate (4.9% growth) and Wednesday’s report. If the actual number is lower than 4.9%, that could be good for mortgage rates. If it’s higher, it could be bad.

Others

There are a couple of other economic reports next week that could affect mortgage rates. But they’d normally have to contain shocking data to move them far or for long.

Watch out for Tuesday’s consumer confidence index and Friday’s purchasing managers’ index for the manufacturing sector from the Institute for Supply Management (ISM).

Uncertainty

So, those are next week’s main scheduled events and reports. Most of the time, those are the things that can move mortgage rates.

However, we live in an uncertain world. And there’s always a possibility of some unexpected and huge national or global event occurring that could transform the outlook for markets.

Economic reports next week

See the last section for details about the more important economic reports next week.

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 — October new home sales
• Tuesday — November consumer confidence. Plus September’s S&P Case-Shiller home price index
• Wednesday — Q3/23 GDP (first revision)
• Thursday — October PCE price index. And October pending home sales. Plus initial claims for jobless benefits for the week ending Nov. 25
• Friday — November ISM PMI for the manufacturing sector

Thursday could be the most important day for mortgage rates next week. But watch out, too, for the Fed Chair’s speech on Friday.

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

Mortgage rates forecast for next week

Once again, I’m hoping that mortgage rates next week might barely change. But that relies on that week’s inflation and GDP figures being close to forecasts — and no surprises from the Fed Chair’s speech. If those don’t pan out, all bets are off.

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.