Mortgage rates today, Oct. 14, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell modestly yesterday. And it’s been a good week for those rates overall. However, that’s only in comparison with last Friday evening’s high, which was close to a record for the 21st century.

The mood seems to have turned a bit more positive on Wall Street. And I’m hoping mortgage rates next week might fall again. However, markets are facing a huge amount of uncertainty, and that prediction is precariously balanced.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

We’ll likely have brief and unpredictable periods when mortgage rates fall. But I’m not expecting a sustained and significant downward trend until sometime 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

A lot has changed this week. But the biggest change for mortgage rates has been a switch in mood in both markets and the Federal Reserve.

A week ago, the Fed line was that it would probably hike general interest rates at least once more this year. And its central message was “higher for longer,” meaning those rates would remain more elevated for a more sustained period than markets were expecting.

Although the Fed doesn’t directly determine mortgage rates, its rates policies do affect the bond market that does determine them. So, that messaging was bad for mortgage rates.

Regular readers may remember that I wrote yesterday about how closely markets will be listening to top Fed officials when they have speaking engagements. This week, many of those officials have taken opportunities to play down the central bank’s higher-for-longer mantra.

Nobody’s been making promises, and everyone says final decisions will be driven by economic data, but you couldn’t fail to spot a more dovish tone. And that — together with worries about events in the Middle East — explains why mortgage rates have just had a pretty good week.

Next week

Top Fed officials have a whopping 11 speaking engagements scheduled for next week, including one on Thursday featuring the highly influential Fed Chair Jerome Powell. Expect markets to continue to monitor these closely. The less likely a further hike in general interest rates this year seems, the better for mortgage rates.

Next week’s big economic report lands on Tuesday. And it is for retail sales in September.

Markets are expecting those to have slowed that month to 0.2% growth, compared to 0.6% in August. If actual growth in September was higher than expected, that could add upward pressure to mortgage rates. But, if it’s lower, that could send mortgage rates downward.

Retail sales figures are currently nothing like as important to markets as inflation and employment reports. But, with the U.S. economy largely fueled by consumer spending, they’re a useful gauge of how we’re doing.

Economic reports next week

See the last section for details of next week’s biggest economic report, retail sales in September.

In the following list of next week’s reports and events, 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 or news.

• Tuesday — September retail sales. Plus industrial production and capacity utilization that month
• Wednesday — September housing starts and building permits
• Thursday — September existing home sales and leading economic indicators. And initial claims for jobless benefits for the week ending Oct. 14

Watch out for Tuesday’s retail sales! And for Fed speeches on every business day next week.

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

Mortgage rates forecast for next week

As regular readers know, I have a low level of confidence in these weekly predictions. And that’s especially true during times of heightened uncertainty, such as the one we’re currently in.

But I guess that mortgage rates next week are more likely to fall than rise. However, only a bit more likely.

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.