Today's mortgage rates
Average mortgage rates fell a bit yesterday, and the week overall was good, with rates ending the week much lower than they began, but still higher than anyone would like.
Mortgage rates are once again unpredictable next week, with Thursday's Consumer Price Index (CPI) data likely to affect rates, and I have no idea what fear or delight (or boredom) that will bring.
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Current Mortgage and Refinance Rates
Program Mortgage Rate APR* Variable 10-Year Traditional Fixed 6.378% 6.448% -0.02 30-Year Traditional Fixed 7.079% 7.13% +0.02 20-Year Traditional Fixed 6.855% 6.912% -0.04 5/1 ARM Traditional 6.517% 7.699% -0.01 30-Year Fixed VA 6.815% 6.86% -0.25 30-Year Fixed FHA 6.862% 6.91% -0.11 15-Year Traditional Fixed 6.534% 6.615% +0.01 Rates are provided by our partner network and may not reflect the market. Your rate may vary. Click here for a personalized interest rate quote. See our interest rate assumptions. Find and lock in a low rate
Should you lock in your mortgage rate today?
Overall, there's very little to complain about mortgage rates so far in June and July, with current rates being much closer to the minimum rates than the maximum rates for that period.
Does this mean that these interest rates have begun a long-awaited, sustainable downward trend? Possibly. But I don't think so.
I think it's likely that mortgage rates will remain aimless for at least another couple of months, maybe longer, before dropping with more purpose.
However, this opinion is not as certain as it was a week or two ago, and it is possible that a more benign trend will emerge in early August. We will just have to wait and see. More on this below.
Either way, my personal rate lock recommendation remains the same.
Lock if closing within 7 days Lock if closing within 15 days Lock if closing within 30 days Lock if closing within 45 days Lock if closing within 60 days
Of course, we're not advocating you sign a loan on a day when mortgage rates are falling. There will be plenty of days and long periods when interest rates have a bright outlook. Take advantage of those days.
Additionally, with so much uncertainty at the moment, it's entirely possible that your intuition is as good as mine, if not better, so follow your instincts and your tolerance for risk.
Current trends in mortgage interest rates
Overall picture
Two factors have led to a slight drop in mortgage rates this week. The first was Federal Reserve Chairman Jerome Powell, who told central bankers that recent data on inflation and employment could lead the Fed to cut general interest rates sooner than many had feared.
And second, yesterday's official jobs report (also known as the employment situation report) showed that job creation is slowing and the unemployment rate is gradually increasing.
Chairman Powell is scheduled to testify before Congress on Tuesday and Wednesday next week, and Wall Street will be listening closely to see whether yesterday's jobs report further increases the chairman's optimism for an early rate cut.
At this point, few observers believe the Fed will make such a cut when it next issues rates on July 31. But it's entirely possible that on that day the Fed will signal that a Sept. 18 cut is on the way. And that alone could be a good thing for mortgage rates.
But the Fed's stance at the end of the month will depend in large part on two inflation reports released between now and then. The Fed's preferred inflation reading will have to wait until July 26th, but the market's preferred reading should be released next Thursday, July 11th.
Important inflation report next Thursday
For the market, next Thursday's Consumer Price Index (CPI) is often the most important economic report for mortgage rates, covering June.
For these rates to fall, inflation would likely need to cool more than the market expects. A higher-than-expected reading could push rates up. And a similar-to-expected reading could keep rates largely unchanged. (See market expectations below.)
Like most other inflation reports, the CPI has four main components: two of them measure price changes for all items measured in the survey, and the other two indicate “core” prices, which are the same prices excluding food and energy prices, which are more volatile.
Why are there two numbers each for regular price and core price? Because the changes are measured over different time periods. You get a number for the reporting month (June) and a year-over-year (YOY, from July 1, 2023 to June 30, 2024) number.
What does the market expect from CPI?
Market expectations are based on the consensus forecasts of analysts, who are specialized economists who study a particular aspect of the economy, in this case inflation. I use MarketWatch for my reports, but there are several others.
And here are today's overnight market expectations:
CPI was 0.1% in June, up from 0.0% in May. Year-over-year CPI was 3.1%, down from 3.3% in May. Core CPI was 0.2% in June, unchanged from May. Year-over-year core CPI was 3.4%, unchanged from May.
The larger the gap between market expectations and Thursday's actual data, the larger the movement in mortgage rates is likely to be. Remember, we want mortgage rates to fall, so we want actual data to be lower than expected.
The second inflation report is due to be released on Friday
Apart from the Consumer Price Index, most of the economic data coming out next week is unlikely to have a visible impact on mortgage rates, but Friday's Producer Price Index (PPI) could have some impact.
As the name suggests, this is the little brother of the CPI. While it's not as powerful as its big sister, it does still move mortgage rates. We'll explain this in more detail next Thursday.
Overview of next week's economic reports and events
See above for details on some of the more important economic reports coming up next week, as well as explanations of the abbreviations below.
In the list below of next week's reports, only those in bold are likely to have a noticeable impact on mortgage rates. The rest of the reports are unlikely to have a big impact unless they contain surprisingly good or bad data.
Monday — Consumer credit for May Tuesday — Federal Reserve Chairman's testimony before the Senate. Plus, the National Federation of Independent Business' Small Business Optimism Index for June Wednesday — Federal Reserve Chairman's testimony before the House of Representatives. Plus, wholesale inventories for May Thursday — Consumer Price Index for June. Plus, the federal budget for June. Plus, unemployment claims for the week ending July 6 Friday — Producer Price Index for June. Plus, preliminary consumer confidence for July
Thursday's CPI will likely have the most impact on mortgage rates next week, but keep an eye on the Fed Chairman's testimony.
Time to move? Find the mortgage that's right for you
Next week's mortgage interest rates forecast
Again, it's impossible to predict where mortgage rates will be next week. Thursday's Consumer Price Index will likely determine this, but the Fed chairman will also have a major influence. And at this point, both are unpredictable.
How home loan interest rates are determined
The bond market generally determines mortgage and refinancing interest rates, and it is also the market where mortgage-backed securities trade.
And it depends a lot on the economy: mortgage rates tend to be higher in good times and lower in bad times, but inflation can counterbalance these trends.
Your role
But there are five roles you play in determining your mortgage interest rate: And you can have a big impact on your rate in the following ways:
Shop around for the best mortgage rate — rates vary widely from lender to lender Increase your credit score — even a small increase can make a big difference in your interest rate and payment Save up as large a down payment as you can — lenders want you to be serious about the game Stay modest on your other borrowing — the fewer other monthly commitments you have, the larger the mortgage you can pay Choose your mortgage carefully — is a conventional, conforming, FHA, VA, USDA, jumbo, or another loan better for you?
Taking the time to prepare these things can help you win a lower interest rate.
Remember, these aren't just mortgage rates
When calculating how much of a mortgage you can afford, be sure to factor in all of the upcoming costs of homeownership. Keep an eye out for something called “PITI.” PITI stands for:
Principal — the repayment of the amount borrowed Interest — the cost of borrowing money Taxes — especially property taxes Insurance — especially homeowners insurance
Our mortgage calculator can help you with this.
Depending on the type of mortgage and the size of your down payment, you may also have to pay mortgage insurance, which can easily reach triple figures each month.
But there are other potential costs, too: Namely, if you choose to live somewhere with an HOA, you'll have to pay homeowner's association dues. And no matter where you live, you should be prepared for repair and maintenance costs, so you don't have to worry about having to contact your landlord if something goes wrong.
Finally, it's hard to forget about closing costs, which are reflected in the annual percentage rate (APR) offered by your lender, which essentially spreads the costs over the life of the loan, meaning that the rate will be higher than a typical mortgage interest rate.
But you may be able to get help with closing costs and down payments, especially if you're a first-time home buyer. Learn more:
State down payment assistance programs for 2023
How to calculate mortgage interest rates
Every day, Mortgage Report receives interest rates based on your chosen criteria from multiple lending partners. It calculates the average interest rate and APR for each loan type and displays them in a chart. It averages the different interest rates so you get a more accurate picture of what interest rates you can find in the market. It also calculates the average interest rate for the same loan type, for example, FHA fixed rate vs. FHA fixed rate. The result is a clearer picture of your daily interest rates and how they change over time.