Today’s mortgage rates
Average mortgage rates fell appreciably yesterday. And the good news is that they rose only modestly over the last week. We saw a couple of sharp rises during the first half of the week, which took these rates to a new 22-year high. But yesterday’s big fall, together with a couple of smaller ones, largely canceled those out.
A government shutdown from midnight tonight could stop many official reports from appearing next week. That would mean even more uncertainty for investors. And markets hate uncertainty. So, I’m saying mortgage rates next week are unpredictable and will probably be volatile.Find and lock a low rate
Current mortgage and refinance rates
|Conventional 30-year fixed|
|Conventional 30-year fixed||7.809%||7.84%||Unchanged|
|Conventional 15-year fixed|
|Conventional 15-year fixed||6.976%||6.986%||Unchanged|
|Conventional 20-year fixed|
|Conventional 20-year fixed||7.992%||8.054%||Unchanged|
|Conventional 10-year fixed|
|Conventional 10-year fixed||7%||7%||Unchanged|
|30-year fixed FHA|
|30-year fixed FHA||7.3%||7.94%||Unchanged|
|15-year fixed FHA|
|15-year fixed FHA||7%||7.276%||Unchanged|
|30-year fixed VA|
|30-year fixed VA||7%||7.212%||Unchanged|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.|
Should you lock a mortgage rate today?
Financial media are suddenly talking much more about a possible recession than they have been in recent months. And one of those could be good for mortgage rates if it turns up.
But I doubt we’ll see one during 2023. And 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
There’s always some uncertainty in markets. But it’s especially elevated at the moment.
On the one hand, we see gloomy types, who are convinced that we’re steaming toward a recession and reckon that the inflation rate might rise again. On the other are optimists, who see inflation falling in spite of a resilient economy. They believe we may see a “soft landing,” meaning a normal inflation rate without a recession.
Both groups can make convincing cases for their predictions. And nobody can be confident about who will be proved right. That’s why we’re seeing so much volatility in markets and mortgage rates.
Federal government departments, bureaus and agencies publish the most important economic reports. And those will be severely affected by the government shutdown, which currently seems close to inevitable.
Yesterday, Reuters said, “Delays of vital economic data releases could trigger financial market volatility if a U.S. government shutdown goes ahead this weekend and drags on for weeks, leaving investors to use alternative data sources to determine the economy’s trajectory.”
Will Congress head off the imminent shutdown, allowing next week’s reports to appear as usual? I doubt it.
Still, I’ll cover them here as if they will be published. Just in case.
The labor market
There are plenty of economic reports on next week’s calendar that could move mortgage rates. But by far the most important is September’s jobs report, formally called the employment situation report, which is due next Friday.
Right now, the consensus forecasts among analysts (specialist economists) for the main elements of the report are:
- Nonfarm payrolls (number of new jobs created in September) — Modestly lower: down to 170,000 from 187,000 in August
- Unemployment rate — Minimally lower: down to 3.7% from 3.8%
- Hourly wages — Slightly higher: up by 0.3% compared to August’s 0.2% rise
Those forecasts suggest the labor market remains strong. And it would be good for mortgage rates if it were weakening faster.
But investors are now expecting those forecast outcomes. And, if the predictions prove entirely correct, mortgage rates might barely move on Friday. If the labor market is stronger than expected, that could push those rates higher. But weaker-than-expected figures could pull them lower.
A couple of other employment reports earlier in the week could also affect mortgage rates, though probably less so than the jobs report. First up, is Tuesday’s job openings and labor turnover survey (JOLTS) for August. Analysts are forecasting its headline number will be the same as July’s.
Then, on Wednesday, comes ADP’s private-sector employment data. This is sometimes seen as a bellwether for the official jobs report. And, if the latter isn’t published, the ADP data may become much more influential than usual.
Companies and trade bodies publish four of the other reports next week. So, they’re safe regardless of whether the government shuts down.
And, like the ADP report, they might take on more significance than usual. When you’re making investment decisions, any data are better than none.
The four are purchasing managers’ indexes (PMIs) from S&P and the Institute for Supply Management (ISM). There are two scheduled from each organization: one for the manufacturing sector and one for the services sector.
PMIs are pretty good indicators of future economic activity. Who knows better than the people who order goods, services and materials how busy their companies are going to be?
The government will officially shut down at 12:01 a.m. (ET) Sunday, although most departments were effectively shuttered yesterday evening.
Of course, it’s still possible that a shutdown will be averted if lawmakers on Capitol Hill manage to pass spending bills before the deadline. But a political impasse is making that look increasingly unlikely.
Many think that a shutdown itself will initially only slightly upset markets. After all, this will be the fourth in a decade so they’re rapidly becoming routine.
However, the longer one drags on, the more economic harm it could do. And then markets will sit up and take notice.
Economic harm tends to be good for mortgage rates, pulling them lower. So, this economic cloud could have a silver lining. But it’s a pretty thin one considering the consequences for millions of Americans.
Economic reports next week
We may well miss out on some of next week’s most important economic reports (including the all-important jobs report) if the government shuts down, as expected. I’m listing them in the hope they’ll still appear. And, in the following list, I have added an asterisk to the ones at risk.
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.
- Monday — September manufacturing-sector PMIs from S&P and the ISM. August construction spending*
- Tuesday — August job openings and labor turnover survey (JOLTS)*
- Wednesday — September ADP employment report. And services-sector PMIs from S&P and the ISM
- Thursday — August trade deficit*. And initial claims for jobless benefits* for the week ending Sep. 30
- Friday — September employment situation report (jobs report)*. And August consumer credit*
We may get no official reports next week. But that could make markets more volatile, not less.
Mortgage rates forecast for next week
I can only say that mortgage rates will be unpredictable next week. And they’ll likely be volatile.
I guess that all markets will be that way.
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.
But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Shopping around for your best mortgage rate — They vary widely from lender to lender
- Boosting your credit score — Even a small bump can make a big difference to your rate and payments
- Saving the biggest down payment you can — Lenders like you to have real skin in this game
- Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
- 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:
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.