Today’s Mortgage and Refinance Rates
Average mortgage rates rose significantly yesterday. It was unexpected. So read on to find out what happened.
Next week brings a potentially crucial event for mortgage rates. But no one can know how it will turn out. So i will say that mortgage rates next week are unpredictable. Sorry for the (rare) loophole. But even educated guesses are irresponsible under the current circumstances.
Find and Lock in a Low Rate (Sep 18, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||3.048%||3.063%||+ 0.04%|
|Conventional 15 years fixed||2.39%||2,415%||+ 0.03%|
|Conventional 20 years fixed||2,898%||2.931%||+ 0.06%|
|Conventional 10 years fixed||2.319%||2,376%||+ 0.05%|
|30-year fixed FHA||2.993%||3.75%||+ 0.01%|
|15 years fixed FHA||2,439%||3.082%||+ 0.05%|
|5/1 ARM FHA||2.16%||2,971%||Unchanged|
|Fixed VA over 30 years||2.846%||3.036%||+ 0.03%|
|VA fixed 15 years||2.653%||3.002%||+ 0.04%|
|5/1 ARM VA||2,421%||2,272%||Unchanged|
|Prices are provided by our network of partners and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our pricing assumptions here.|
Find and Lock in a Low Rate (Sep 18, 2021)
COVID-19 Mortgage Updates: Mortgage lenders change rates and rules due to COVID-19. To see the latest information on the impact of the coronavirus on your home loan, click here.
Should you lock in a mortgage rate today?
I would lock in my mortgage rate if I were you. But beware of temporarily lower rates, which could arrive next Monday morning.
Next Wednesday’s big event (see below for more details) could go both ways. And it is possible that these rates will drop on or after Wednesday. But it is also possible that they increase considerably.
If I had to bet I would put a few dollars on their downfall. But we’re talking about your next mortgage rate here. And those stakes would be too high for me. Of course, you might be a braver player than I am. And only you can decide how much risk you’re comfortable with.
I am modifying my personal recommendations today to reflect next week’s risk. But I can change them again on Thursday if things go well for the tariffs:
- 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, if not better. So let your instincts and your personal risk tolerance guide you.
What changes current mortgage rates
Average 30-year fixed-rate mortgage rates jumped 7 basis points (one basis point is one hundredth of 1%) yesterday and 3 basis points on Thursday, according to data from Mortgage News Daily (MND ). And that saw those rates drop from 2.93% Wednesday night to 3.03% last night.
Now, under normal circumstances, 10 basis points over two business days would not be considered a shocking increase. But we’ve gotten used to dormant mortgage rates in recent months. And that certainly shocked me. So we’ll discuss what caused it next.
Reason for the rise: next week’s big event
Market comments I have read suggest that these increases are the result of investor positioning ahead of the Federal Reserve press conference on Wednesday (September 22). I have been reporting this date as a risk for mortgage rates for several weeks.
Because it is possible that the Fed will announce at its press conference that day that it is slowing down and later stopping (“tapering”) some of its easy money policies, which include maintaining artificially low mortgage rates. And the last time she made such an announcement about a similar program, in 2013, mortgage rates skyrocketed.
And yet, I think the announcement will be more likely to be made on November 3 or December 15, which are the dates of the other two Fed press conferences scheduled for this year.
Why? Because, despite the strong voices within the Fed advocating an early date for tapering, cooler heads have so far prevailed. And I don’t yet see enough economic evidence of better jobs numbers or lower inflation rates for hotheads to sway the majority.
And even …
Of course, everyone (including me) assumes that the types of hard-hitting investors who can move the markets are a lot smarter than me. And the mortgage rate hikes on Thursday and yesterday suggest they think the Fed may take action next Wednesday. Maybe they have inside information – or, more likely, they hear rumors.
Either way, today’s rates are the current reality. And we will know on Wednesday whether they are justified or not.
Some good news
There is a silver lining for mortgage rates next Monday. Because these often reflect the yields of 10-year treasury bills.
And those yields behaved differently yesterday from mortgage rates. They jumped at the start of the day, rising to 1.39% against an open of 1.34%. But then they pulled back, closing at 1.36%. And that’s only a moderate increase.
So it’s possible that mortgage rates will also drop on Monday morning, as lenders adjust their rates to reflect changes later on Friday.
Economic reports next week
The Fed’s statement next Wednesday at 2 p.m. ET and the press conference 30 minutes later are expected to dominate next week. For mortgage rates, this could change everything (less likely) or nothing (more likely).
None of the economic reports listed below are likely to cause much movement in the markets unless they include some incredibly good or bad data:
- Tuesday – August Building permits and starts
- Wednesday – Fed Events and Existing Home Sales for August
- Thursday – August leading economic indicators. No more new weekly unemployment insurance claims until September 18
- Friday – New home sales for August
Wednesday is the day to watch.
Find and Lock in a Low Rate (Sep 18, 2021)
Mortgage interest rate forecasts for next week
It depends so much on the Fed press conference next Wednesday that I can’t make a valid prediction for mortgage rates next week.
Mortgage and refinancing rates generally move in tandem. And a growing gap between the two has been largely eliminated by the recent removal of unfavorable refinancing fees from the market.
And another regulatory change, announced this week, has likely made mortgages for investment property and vacation homes more accessible and less expensive.
How your mortgage interest rate is determined
Mortgage and refinancing rates are generally 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. Mortgage rates therefore 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 significantly affect it by:
- Find Your Best Mortgage Rate – They Vary Dramatically From Lender to Lender
- Increase Your Credit Score – Even a Small Bump Can Make a Big Difference in Your Rate and Payments
- Save the Biggest Down Payment Possible – Lenders love you to have real skin in this game
- Keep your other loans small – The lower your other monthly commitments, the larger the mortgage you can afford
- Choosing Your Mortgage Carefully – Are you better off with a conventional, FHA, VA, USDA, jumbo or whatever loan?
The time spent getting those ducks in a row can earn you lower rates.
Remember, it’s not just a mortgage rate
Be sure to count all of your upcoming homeownership costs when determining how much mortgage you can afford. So focus on your “PITI”. It’s your Pmain (reimburses the amount you borrowed), Iinterest (the loan price), (property) Taxes, and (owners) Iassurance. Our mortgage calculator can help.
Depending on the type of mortgage you have and the amount of your down payment, you may also need to pay for mortgage default insurance. And that can easily reach three digits each month.
But there are other potential costs. You will therefore 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 in case of a problem!
Finally, you will have a hard time forgetting the closing costs. You can see which are reflected in the Annual Percentage Rate (APR) that will be shown to you. Because it effectively spreads them out over the life 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 each 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 an APR for each type of loan to display in our graph. Because we average a range of rates, it gives you a better idea of what you might find in the market. In addition, we average the rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good overview of daily rates and how they have changed over time.