Today’s Mortgage and Refinance Rates
Average mortgage rates rose significantly yesterday. This week’s sharp rises were smaller than last week’s sharp declines. But, overall, those two weeks almost exactly canceled each other out.
This swing has been a common feature of these rates for the past few weeks. And, if this continues, mortgage rates would drop over the next seven days. But, although I explain further down the page why this happens, such unreliable patterns are a terrible way to make important decisions. So I continue to make no formal weekly predictions.
Current mortgage and refinance rates
|Program||Mortgage rate||APR*||To change|
|30-year fixed conventional||5.958%||5.993%||+0.04%|
|15-year fixed conventional||5.125%||5.18%||+0.17%|
|20-year fixed conventional||5.943%||5.999%||+0.06%|
|10-year fixed conventional||5.163%||5.265%||+0.3%|
|30-year fixed FHA||6.047%||6.822%||+0.02%|
|15-year fixed FHA||5.277%||5.766%||+0.12%|
|30-year fixed PV||5.155%||5.373%||+0.04%|
|15-year fixed VA||5.2%||5.572%||+0.01%|
|Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.|
Should you lock in a mortgage rate today?
Don’t lock in on a day when mortgage rates look set to drop. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. Thus, they do not change daily to reflect fleeting sentiments in volatile markets.
Mortgage rates continue on their metaphorical roller coaster, rising and falling for a white fist bump. But, like a real roller coaster, they end up close to where they started.
Some think it’s good. Because it suggests that markets are setting floors and ceilings that they won’t cross without a very good reason. My only objection to this theory is that I doubt that the markets are collectively capable of such sophisticated thinking.
The result of all this is a lot of sound and fury – and very little else. Most sudden movements cancel each other out. And that left mortgage rates a little higher in June and again so far in July.
Loyal readers (Hello!) may remember that I have been predicting such a situation for months: mortgage rates continue to rise but much more slowly than during the first five months of the year.
So my personal rate lock recommendations remain:
- TO BLOCK if closing seven days
- TO BLOCK if closing 15 days
- TO BLOCK if closing 30 days
- TO BLOCK if closing 45 days
- TO BLOCK if closing 60 days
However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, or even better. So let your instincts and personal risk tolerance guide you.
What’s Moving Current Mortgage Rates
The markets currently have two obsessions: inflation and a possible future recession. When they focus on the former, mortgage rates generally go up. When focused on recession fears, these rates typically fall.
Sometimes they focus on a whim or a rumor. But most of the time they do it because of a new economic report.
Yesterday’s official jobs report for June showed recruitment holding up much better than expected. And that makes the prospect of a recession much more remote. As Comerica Bank Chief Economist Bill Adams wrote in his weekly e-newsletter yesterday:
The jobs report shows that the US economy was not in recession in the first half.
So that day mortgage rates went up. And I shouldn’t be surprised if the data keeps them high or pushes them higher for a while.
However, next week’s economic reports are largely about inflation. And Friday’s jobs data could soon be forgotten if those reports show a cooling in inflation. I’m not expecting particularly good price news, so it will be a nice surprise if that happens and pushes mortgage rates down.
Economic reports next week
Next Friday’s retail sales figures for June could reveal how resilient the US economy is to many global stresses – and therefore the likelihood of a recession. But most of the crucial reports next week relate to inflation and include the Consumer Price Index (CPI) and the Producer Price Index, which is an early indicator of price direction.
As we have already mentioned, inflation is one of the two main obsessions of the markets at the moment. So we could well see some volatility.
The potentially most important reports below are highlighted in bold. The others are unlikely to move the markets much unless they contain surprisingly good or bad data.
- Monday – Three-year inflation expectations in June
- Tuesday – National Federation of Independent Business (NFIB) June Small Business Index
- Wednesday — June consumer price index
- Thursday — June producer price index for the final request. New weekly unemployment insurance claims until July 9
- Friday — June retail sales. Plus industrial production and capacity utilization for that month. Also July consumer sentiment index
This is an exceptionally busy week for these reports.
Mortgage interest rate forecast for next week
Again, there are no predictions on what might happen to mortgage rates next week. Sorry, but there’s just too much volatility right now to make a guess.
I believe mortgage rates are more likely to rise slightly than fall over the next few weeks. But the next seven days could go either way. And you should expect plenty of up and down jerks for a while.
Mortgage and refinance rates generally move in tandem. And the removal of unfavorable market refinancing charges last year has largely eliminated the gap that had grown between the two.
How your mortgage interest rate is determined
Mortgage and refinance rates are typically determined by prices in a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.
And it depends heavily on the economy. Thus, mortgage rates tend to be high when things are going well and low when the economy is struggling.
But you play an important role in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Shop around for your best mortgage rate – They vary widely from lender to lender
- Boost your credit score – Even a small bump can make a big difference to your rate and payments
- Save the biggest down payment possible – Lenders like you to have real skin in this game
- Keep your other borrowings small — The lower your other monthly commitments, the higher the mortgage you can afford
- Choose your mortgage carefully – Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or other loan?
Time spent getting these ducks in a row can earn you lower rates.
Remember it’s not just a mortgage rate
Be sure to factor in all of your homeownership costs when calculating how much mortgage you can afford. So focus on your “PITI”. It’s your Pprincipal (repays the amount you borrowed), IInterest (the price of the loan), (the property) Jaxes, and (owners) Iinsurance. Our mortgage loan calculator can help you.
Depending on your type of mortgage and the amount of your down payment, you may also need to pay for mortgage insurance. And that can easily hit three figures every month.
But there are other potential costs. So you will have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repair and maintenance costs. There is no owner to call when things go wrong!
Finally, you will have a hard time forgetting closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because it spreads them effectively over the term of your loan, making it higher than your normal mortgage rate.
But you may be able to get help with those closing costs. and your down payment, especially if you are a first-time buyer. Lily:
Down payment assistance programs in every state for 2021
Mortgage Rate Methodology
Mortgage reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and APR for each loan type to display in our chart. Because we average a range of prices, it gives you a better idea of what you might find in the market. In addition, we calculate the average of the rates for the same types of loan. For example, fixed FHA with fixed FHA. The result is a good overview of the daily rates and their development over time.
The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.