Today’s mortgage and refinance rates
Average mortgage rates fell modestly yesterday. Unfortunately, that was the first drop after nine consecutive business days of rises. And 2022 continues to be a terrible year for those rates.
There’s a good chance mortgage rates might rise next week. I can see little to suggest that the upward trend is ending. But we may be due a relatively brief period of modest falls soon. And that could turn up over the coming seven days.
Current mortgage and refinance rates
|Conventional 30 year fixed||4.472%||4,497%||-0.07%|
|Conventional 15 year fixed||3,638%||3.672%||-0.02%|
|Conventional 20 year fixed||4.373%||4.409%||-0.07%|
|Conventional 10 year fixed||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 VA||4.463%||4.67%||-0.03%|
|15 year fixed VA||3.766%||4.101%||+0.02%|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personal rate quote. See our rate assumptions here.|
Should you lock a mortgage rate today?
I’d lock my rate on the first morning when mortgage rates look likely to rise. Recently, that’s been most mornings.
Overall, I’m expecting increases in mortgage rates to outweigh falls for some months to come, perhaps into next year. But, with luck, we could see them rise more slowly than recently. And we may see more periods when they fall.
Still, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15th 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 personal tolerance for risk help 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 tackle inflation as aggressively as necessary. In market jargon, they’re “hawkish.”
Unfortunately, both the tools at the Fed’s disposal to lower inflation tend to push mortgage rates higher. No wonder so many commentators — from Fed Chair Jerome Powell to Freddie Mac Chief Economist Sam Khater — are explicitly predicting that those rates will continue to rise through this year.
Might the worst be over?
You’ll be lucky to find an observer of mortgage rates who believes they’re going to fall consistently anytime soon. The consensus that they’re going to continue higher is strong.
However, many think the worst rises are in the rearview mirror. Bond markets do their best to trade ahead of events, including Fed actions. And the market that largely determines mortgage rates, in which mortgage-backed securities (MBSs) are traded, is no exception.
For months now, the Fed has been clearly signaling its intentions. And a whole lot of 2022’s mortgage rate increases have been a result of investors trading in anticipation of its changes. So we may have already endured much of the pain.
Still, there may be some more to come. The Fed hasn’t yet unveiled its plans to sell its $2.73 trillion stockpile of mortgage-backed securities. Chances are, it will announce them on May 4, after its next FOMC meeting.
If those plans show that the Fed will sell its MBSs more quickly than markets hope, that could see more sharp rises in mortgage rates. But if sales are going to be slower than — or in line with — what’s expected, we might escape those increases.
Still, the best scenario I can see is that mortgage rates drift gently higher through 2023. Of course, there will be days and longer periods of falls. Because that’s how markets work. But it will probably take an unexpected and truly cataclysmic event for them to fall again consistently.
Economic reports next week
Next week is a fairly slow one for economic reports. Durable goods orders on Thursday and the consumer sentiment index on Friday might give some clues about how the economic recovery is doing. But I’d be surprised if they moved mortgage rates far.
The potentially most important reports, below, are set in bold. The others are unlikely to move markets much unless they contain shockingly good or bad data.
- Wednesday — February new homes sales
- Thursday — February durable goods orders and capital goods orders. Plus weekly new claims for unemployment insurance to March 19
- Friday — March consumer sentiment index
Chances are, we’re in for a quiet week.
Mortgage interest rates forecast for next week
Once again, I shouldn’t be surprised if mortgage rates were to move higher next week. But we’re due a brief period of modest falls soon. And that could come next week. If it does, my prediction could be wrong.
Mortgage and refinance rates usually move in tandem. And the scrapping of the adverse market refinance fee last year has largely eliminated a 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 costly.
How your mortgage interest rate is determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.
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 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 your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (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 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:
Down payment assistance programs in every state for 2021
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.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement 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, or affiliates.