Today’s Mortgage and Refinance Rates
Average mortgage rates fell slightly yesterday. Unfortunately, this was the first decline after nine consecutive trading days of increases. And 2022 continues to be a terrible year for these rates.
There is a good chance mortgage rates could rise next week. I see little to suggest the uptrend is ending. But we may soon have to experience a relatively brief period of modest falls. And that could happen over the next seven days.
Current mortgage and refinance rates
|30-year fixed conventional||4.472%||4.497%||-0.07%|
|15-year fixed conventional||3.638%||3.672%||-0.02%|
|20-year fixed conventional||4.373%||4.409%||-0.07%|
|10-year fixed conventional||3.616%||3.679%||-0.08%|
|30-year fixed FHA||4.585%||5.381%||-0.02%|
|15-year fixed FHA||4.018%||4.68%||+0.1%|
|30-year fixed PV||4.463%||4.67%||-0.03%|
|15-year fixed VA||3.766%||4.101%||+0.02%|
|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?
I would lock in my rate on the first morning when mortgage rates look likely to rise. Recently it was most mornings.
Overall, I expect the mortgage rate increases to outweigh the decreases for a few months, maybe next year. But, with luck, we could see them increasing more slowly than recently. And we can see more periods where they fall.
Still, my personal rate lock recommendations remain:
- LOCK if closing 7 days
- LOCK if closing 15 days
- LOCK if closing 30 days
- LOCK if closing 45 days
- LOCK 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
Last week’s meeting of the Federal Reserve’s Federal Open Market Committee (FOMC) revealed that its members are determined to fight inflation as aggressively as necessary. In market jargon, they are “hawkish”.
Unfortunately, the two tools available to the Fed to reduce inflation tend to drive up mortgage rates. No wonder so many commentators – from Fed Chairman Jerome Powell to Freddie Mac chief economist Sam Khater – are explicitly predicting that these rates will continue to rise this year.
Could the worst be over?
You’ll be lucky to find a mortgage rate watcher who thinks they’re going to come down steadily anytime soon. The consensus that they will continue to rise is strong.
However, many believe that the worst increases are in the rear view mirror. Bond markets are doing their best to trade ahead of events, including Fed actions. And the market that largely determines mortgage rates, in which mortgage-backed securities (MBS) are traded, is no exception.
For months, the Fed has been clearly signaling its intentions. And much of the 2022 mortgage rate increases were the result of investors trading in anticipation of its changes. So we may have already endured a lot of the pain.
Still, there may be more to come. The Fed has not yet announced its intention to sell its $2.73 trillion stock of mortgage-backed securities. Chances are he will announce them on May 4, after his next FOMC meeting.
If these plans show that the Fed will sell its MBS faster than the markets expect, it could lead to bigger increases in mortgage rates. But if sales are slower than – or in line with – expectations, we could escape those increases.
Still, the best case scenario I can see is for mortgage rates to rise slightly through 2023. Of course, there will be longer down days and periods. Because that’s how markets work. But it will likely take some unexpected and truly cataclysmic event for them to fall steadily.
Economic reports next week
Next week is quite slow for economic reports. Thursday’s durable goods orders and Friday’s consumer confidence index could give some clues on the evolution of the economic recovery. But I’d be surprised if they move mortgage rates that far.
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.
- New home sales from Wednesday to February
- Thursday – February durable goods orders and orders for capital goods. Plus new weekly unemployment insurance claims through March 19
- Friday – March consumer sentiment index
Chances are we will have a quiet week.
Mortgage interest rate forecast for next week
Again, I shouldn’t be surprised if mortgage rates were expected to rise next week. But we will soon have a brief period of modest falls. And that could come next week. If so, my prediction might be wrong.
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.
Meanwhile, another recent regulatory change has likely made mortgages for investment properties and vacation homes more accessible and less expensive.
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:
- Find your best mortgage rate – They vary widely between lenders
- 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 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) Iassurance. 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. Read:
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 average rates for the same types of loans. 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.