Today’s mortgage and refinancing rates
Average mortgage rates rose yesterday. And after three consecutive working days of growth, they returned to the level that was last seen on July 20. This is based on Mortgage News Daily (MND) data on 30-year fixed rate mortgages (FRM).
Mortgage rates may continue to rise next week… But this is far from the case. Read on to find out why we are at the no-one-knows-point.
Current mortgage and refinancing rates
|Program||Mortgage rate||Annual interest rate *||Change|
|Regular 30-year fixed||2.773%||2.773%||+ 0.03%|
|Regular 15 year fixed||1.99%||1.99%||Without changes|
|Regular 20 year fixed||2.49%||2.49%||+ 0.12%|
|Regular 10 year fixed||1,851%||1,883%||+ 0.01%|
|30 year fixed FHA||2.688%||3.343%||+ 0.11%|
|15 year fixed FHA||2.4%||3.001%||+ 0.03%|
|5/1 ARM FHA||2.5%||3.207%||Without changes|
|30-year fixed VA||2.327%||2.499%||+ 0.08%|
|15 year fixed VA||2.133%||2,453%||+ 0.02%|
|5/1 AWP VA||2.5%||2,386%||Without changes|
|Rates are provided by our partner network and may not reflect the market. Your rating may be different. Click here for a personalized quote… See our rate suggestions here…|
COVID-19 Mortgage News: Mortgage lenders are changing rates and rules due to COVID-19. For the latest information on how the coronavirus can affect your home loan, Click here…
Should you fix your mortgage rate today?
If I needed to block a bet, I would do it now. Average mortgage rates remain exceptionally low, with most borrowers still receiving rates starting at 2. But this has changed significantly since last week.
Yes, the markets still operate in a mystifying way. And it is certainly possible that we will soon see further falls. This is why I left my recommendations for locking the speed on Float for those who need to wait longer before locking is required. But the associated risks are higher than a week ago. And cautious people might want to block now, regardless of the closing date.
At this point, I have made only minor changes to my personal recommendations. But soon they may return to the Red Sea if the situation does not improve.
- CASTLE if closing 7 days
- CASTLE if closing fifteen days
- CASTLE if closing thirty days
- TO SWIM if closing 45 days
- TO SWIM if closing 60 days
However, with so much uncertainty at the moment, your instincts can easily turn out to be as good as mine – or even better. So be guided by your instinct and personal risk tolerance.
What drives current mortgage rates
We’re at one of those no-one-knows-points. True, when it comes to mortgage rates, this is often the case.
But we are currently faced with two similar likely scenarios:
- Mortgage rates are returning to their bearish trend as the fall this week was the result of one-off events.
- These rates continue to rise as this week’s events are the tipping points that have fundamentally changed investor sentiment.
These events can certainly change everything.
The most important development yesterday was the publication of the monthly employment report. These reports have been disappointing lately. And this heightened fears that the economic recovery could be patchy and fragile. But yesterday’s data far exceeded expectations.
Is one month’s worth of data sufficient to convince investors that the recovery is as strong as most other data suggests? We’ll have a better idea when the next week unfolds.
Another important event was the speech of the Deputy Chairman of the Federal Reserve System, Richard Clarida. In it, he made it clear that the Fed intends to cut asset purchases earlier than previously thought.
Regular readers know all about dose reduction. But in short, the Fed is currently buying mortgage-backed securities (MBS, the type of bonds that actually determine mortgage rates) at a rate of $ 40 billion a month. This keeps mortgage rates artificially low. So, when the Fed begins to “narrow” (gradually cut) these purchases, these rates are likely to rise, perhaps sharply.
Until now, the markets have acted as if it will not happen until next year. But it is increasingly likely that the 2021 date will be announced. And maybe soon. Earlier this week, Federal Reserve Governor Christopher Waller told CNBC:
I think you might be ready to make an announcement by September. It depends on what the next two job reports will do. If they turn out to be as strong as the previous one, then I think you have made the necessary progress. If they don’t, then I think you may have to push things back a couple of months.
– Bloomberg, “Fed’s Waller says September call may be justified, “August 2, 2021
Mr. Waller said that on Monday, ahead of yesterday’s big vacancy report. And, if enough investors trust him and Mr. Clarida, we will see mortgage rates start to rise steadily.
Of course, investors have been proving for months that they are more than capable of ignoring any information they don’t want to hear. So we are at another no-one-knows-point.
Economic reports next week
If this week was about employment, the next week was about inflation. By far the most important report is likely to be the CPI for July on Wednesday. But there are others, including the July Producer Price Index (Thursday) and the Import Price Index (Friday).
None of the other economic reports listed below are unlikely to cause strong movement in the markets unless they include shockingly good or bad data. Moreover, regular readers know that in recent months, investors have ignored most economic reports. Thus, the following effects may differ from the usual ones:
- Monday – June vacancies
- Tuesday – Productivity and unit labor costs for the second quarter (preliminary data)
- Wednesday – July Consumer Price Index (CPI) and Core CPI, which is a CPI excluding volatile energy and food prices.
- Thursday – July Producer Price Index. Plus new weekly claims for unemployment insurance until August 7th.
- Friday – July import price index. Plus the first reading of the August Consumer Sentiment Index
Wednesday is a big day.
Forecast of interest rates on mortgages for the next week
I have said many times that we are at the no-one-knows-point. But if I had to guess I would say mortgage rates may rise this week…
Mortgage and refinancing rates usually change at the same time. And the gap that has widened between the two has been largely bridged by the recent write-off. unfavorable market refinancing fee…
How the mortgage interest rate is determined
Mortgage and refinancing rates are usually determined by prices in the secondary market (similar to the stock or bond market) where mortgage-backed securities are traded.
And this is highly dependent on the economy. Thus, mortgage rates are usually high when things are going well and low when the economy is in trouble.
But you play a big role in determining your own mortgage interest rate in five ways. You can significantly influence this:
- Find the best mortgage rate – these vary greatly from lender to lender.
- Improving your credit score – even a small jump can make a big difference in your rates and payments
- Save the biggest down payment – lenders like you will have real skin in this game.
- Keep your other loan modest – the smaller your other monthly commitments, the more mortgage you can afford.
- Choose your mortgage carefully. Are you better off taking a regular loan, FHA, VA, USDA, large or other loan?
Taking the time to get these ducks in a row can result in you winning lower rates.
Remember, this is not just a mortgage rate
Be sure to calculate all the upcoming homeownership costs when deciding how much mortgage you can afford. So focus on your PETE. It’s yours NSrincipal (pays the amount you borrowed), Iinterest (borrowing price), (property) Taxes, and (homeowners) Iinsurance. Our mortgage calculator can help with this.
Depending on your type of mortgage and the amount of your down payment, you may also have to pay for mortgage insurance. And that can easily translate into three-digit numbers every month.
But there are other potential costs too. Therefore, you will have to pay the dues to the homeowners association if you decide to live somewhere with an HOA. And wherever you live, you should expect repair and maintenance costs. When something goes wrong, there is no owner to call!
Finally, it will be difficult for you to forget about the closing costs. You can see them in the Annual Percentage Rate (APR) that you specify. Because it effectively distributes them over the term of your loan, making it higher than your normal mortgage rate.
But you may be able to get help with these final costs. and your down payment, especially if you are buying an item for the first time. To read:
Mortgage rate methodology
Mortgage reports get rates based on selected criteria from several credit partners every day. We get the average rate and annual interest rate for each loan type displayed in our chart. Since we average a set of rates, this gives you a better idea of what you can find on the market. In addition, we average rates for the same loan types. For example, fixed FHA and fixed FHA. The result is a good snapshot of daily rates and how they change over time.