Mortgage rates today, Oct. 28, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates inched higher yesterday. But they moved moderately lower over the whole week.

Last week, I chickened out of predicting this week’s mortgage rates. And I must do so again today. Markets are too volatile for any forecast to be better than a guess — and yours is as good as mine. Watch out for events next week (more on those below) that could send these rates soaring or tumbling.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Nothing’s impossible. But I reckon the chances of mortgage rates falling far and for long are slim over the next few months.

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

I’m mildly surprised that mortgage rates ended this business week lower than they started it. Normally, the sharp rise in gross domestic product (GDP) reported on Thursday would have pushed them higher. And Friday’s inflation data were hardly good news.

There’s clearly something else holding these rates lower. Perhaps quiet concern over the Middle East is having an effect. Or maybe investors are beginning to think that the good economic times may be over soon. Or it could be down to something else that I haven’t spotted yet.

Big economic news is on next week’s calendar. If it’s good enough or bad enough, it might set mortgage rates on a firmer upward or downward trajectory, overwhelming whatever it is that’s troubling markets. Or it may have little impact, leaving uncertainty and volatility in its wake.

So, let’s see what’s coming up next week.

Next week

Employment

There are four employment reports next week. But Friday brings by far the most important.

That’s the official jobs report for October, formally called the employment situation report. Markets are expecting:

• Nonfarm payrolls (the number of new jobs created in October) to be 175,000, way down on September’s exceptional 336,000
• The unemployment rate to hold steady at 3.8%
• Hourly wages to have risen a bit more quickly: by 0.3% rather than September’s 0.2%

As always, unexpectedly good economic data tend to be bad for mortgage rates while unexpectedly bad numbers are usually good for them. When data come in as expected, mortgage rates may barely move.

Two of the other employment reports land on Wednesday. They’re September’s job openings and labor turnover survey (JOLTS) and the ADP employment report, which covers only the private sector. The employment cost index for the third quarter (Q3/23) is due on Tuesday.

Any of those could move mortgage rates. But any effect will likely be swamped by Friday’s jobs report.

The Fed

The Federal Reserve will announce on Wednesday whether it will change general interest rates. This might be a damp squib. Because everyone expects it to hold them steady.

Overnight, the CME FedWatch tool showed that 99.9% of investors in Fed Funds futures are expecting no change. I’m not as certain as that but would still raise an eyebrow if the central bank did hike them again.

So, the Fed’s announcement may be a non-event. But the same can’t be said about the news conference that Fed Chair Jerome Powell will host at 2:30 p.m. (Eastern) that day.

Given this week’s strong GDP growth and unimpressive inflation data, I shouldn’t be a bit surprised if he were to hint that a hike on Dec. 13, following the next meeting of the rate-setting committee, was still on the table. And that might be bad for mortgage rates.

Other economic reports

Next week is peppered with other economic reports that could affect mortgage rates. You’ll find those in the list below.

Watch out especially for purchasing managers’ indexes (PMIs), consumer confidence, construction spending and productivity. I shouldn’t expect any of those to transform the picture for mortgage rates. But they could have some impact on the days they’re published.

Economic reports next week

See the last section for details of next week’s most influential economic news: the jobs report and the Fed’s rate announcement and news conference.

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 or news.

• Tuesday — Q3 employment cost index and October consumer confidence
• Wednesday — Fed rate announcement (2 p.m. Eastern) and news conference (2:30 p.m. Eastern). Plus October ADP employment report and PMIs for the manufacturing sector from S&P and the Institute for Supply Management (ISM). Also September JOLTS and construction spending
• Thursday — Productivity and unit labor costs for Q3/23. Plus September factory orders. And initial claims for jobless benefits for the week ending Oct. 28
• Friday — October jobs report. Plus October PMIs for the services sector from S&P and the ISM

What a crowded week! But Wednesday and Friday are the most crucial days.

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

Mortgage rates forecast for next week

I wish I had a clue about where mortgage rates will be this time next week. But I don’t. And there’s no point in my pretending that I do.

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.