Today’s Mortgage and Refinance Rates
Average mortgage rates rose slightly yesterday. But they fell slightly over the whole week. Eventually they took a break, although it was too small to make much of a difference.
The Federal Reserve’s critical announcements next Wednesday could push mortgage rates up or down – or leave them unchanged. Nobody has a clue what the Fed will say, so I’ll avoid making a prediction for next week.
Current mortgage and refinance rates
|30-year fixed conventional||5.531%||5.557%||+0.02%|
|15-year fixed conventional||4.657%||4.686%||-0.02%|
|20-year fixed conventional||5.523%||5.56%||+0.01%|
|10-year fixed conventional||4.488%||4.546%||-0.01%|
|30-year fixed FHA||5.269%||5.972%||+0.01%|
|15-year fixed FHA||4.761%||5.193%||+0.13%|
|30-year fixed PV||5.214%||5.431%||Unchanged|
|15-year fixed VA||4.75%||5.094%||Unchanged|
|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.
You could wait to lock in your rate until Wednesday afternoon to see if mortgage rates rise or fall in response to these critical Fed announcements (see below), which begin at 2 p.m. the. But it’s a bet.
On the one hand, you could lose if you wait and they climb sharply. On the other hand, you could lose if you lock in now and they fall.
Personally, I am quite cautious. So my 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
Everyone has known for weeks that the Federal Reserve will raise its federal funds rate by 0.5% next Wednesday. And the chances of him deviating from that stated intention are slim.
So you can forget that. The markets have already priced in this rate increase.
What could send mortgage rates plummeting or skyrocketing that day are the Fed’s plans to reduce its holdings of mortgage-backed securities (MBS), the type of bond that largely determines mortgage rates. He has three main options for what he could do with his $2.72 trillion stock. It could:
- Continuing to use income from his holdings to buy new MBS, thereby reducing his stock very, very slowly
- Bank the income from these holdings and let them decline a little faster
- Start actively selling holdings at an announced or unannounced pace
If the first is the case, mortgage rates could fall because the markets have already devised a more aggressive plan. The second option might only see minor moves, as this is what many investors expect.
But the third could drive up mortgage rates. The additional supply from the Fed in the mortgage bond market should drive prices down (supply and demand 101). And, when it comes to all bonds, lower prices inevitably mean higher yields. For MBS, higher yields mean higher mortgage rates.
So watch out for Wednesday afternoon media coverage of Fed announcements. A statement is scheduled to be released at 2 p.m. ET. And, 30 minutes later, Fed Chairman Jerome Powell will host a press conference.
No one (probably not the Fed itself) knows for sure what will be announced next Wednesday. Personally, I think option three is more likely than many others seem. But I’m basing this on recent aggressive rhetoric from senior Fed officials.
And others heard the same things and interpreted those words differently. So please don’t take my opinion too seriously.
Economic reports next week
By far the biggest potential impact on mortgage rates next week comes from Wednesday’s Fed policy announcements. But there are a few economic reports over the next seven days that could influence those rates as well.
Next week’s reports focus on jobs, and it’s been great for the past few months. By far the most influential of these comes on Friday in the form of the official April jobs report.
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 — April Institute for Supply Management (ISM) Manufacturing Index
- tuesday — march Job postings and labor turnover survey (BREAKS). Plus March Factory Orders
- Wednesday – Fed announcements. More April ADP employment report on private sector jobs. And the ISM services index for April
- Thursday — Productivity and unit labor costs in Q1/22. Plus new weekly unemployment insurance claims through April 30
- Friday — April official job status reportincluding non-agricultural payroll, average hourly wage and unemployment rate
Wednesday is the big day. But Friday could also be important.
Mortgage interest rate forecast for next week
Mortgage rates next week are essentially unpredictable. Sorry, but Wednesday’s Fed announcement is too big an unknown for me to stick to.
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:
- 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) 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. 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. As we calculate the average of 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.