Today's mortgage rates
Average mortgage rates fell slightly yesterday, but overall this week has been strong: rates have not increased once in the past seven days, and rates closed at their lowest level in four months yesterday.
Mortgage rates may move a little lower next week. But it's entirely possible that this prediction could be wrong. Read on to find out what's going on.
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Current Mortgage and Refinance Rates
Program Mortgage Rate APR* Variable 30 Year Fixed VA 6.787% 6.833% -0.29 30 Year Fixed FHA 6.74% 6.787% -0.24 Regular 15 Year Fixed 6.406% 6.485% -0.03 Regular 10 Year Fixed 6.295% 6.375% -0.01 Regular 30 Year Fixed 6.935% 6.985% -0.03 Regular 20 Year Fixed 6.651% 6.708% -0.08 5/1 ARM Regular 6.592% 7.807% +0.13 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. View our interest rate assumptions. Find and lock in a low rate
Should you lock in your mortgage rate today?
Last week I wrote: “This is [mortgage] “Have interest rates embarked on a long-awaited, sustainable downward trend? It's possible, but I don't think so.”
Well, I'm still not sure. But many of my doubts have disappeared. We may be witnessing the start of that downward trend. And I'm going to change my personal fixed rate recommendation very soon.
Still, I am always very cautious about what the future holds, so for now, these recommendations remain unchanged.
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 suggesting you sign a contract on a day when mortgage rates are falling. There will be plenty of days and long periods when interest rates have a bright outlook. By all means, 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 intuition and your own tolerance for risk.
Current trends in mortgage interest rates
what happened
Mortgage rates have fallen since July 2nd for three main reasons.
Federal Reserve Chairman Jerome Powell said recent data on inflation and employment may help the central bank cut the central bank's general interest rate sooner than many had feared. The June employment report showed a tightening in the labor market. Thursday's Consumer Price Index (CPI) showed that inflation cooled more quickly than markets had expected.
These three constitute the holy grail of mortgage rate cuts.
Can something still go wrong? Of course.
The inflation report on July 26th may not be good. The Federal Reserve's interest rate setting committee meeting on July 31st may deliver a more pessimistic outlook than expected. The July employment report, due in the first week of August, may show a recovery in the labor market. But for now, the outlook for mortgage rates is brighter than it has been in the past three or so years.
It remains quite unlikely that the Fed will cut general interest rates on July 31. But if all goes well, it could very well signal on that date that it plans to make such a cut on September 18. And that should be enough to lower mortgage rates even further.
Important economic events next week
Fed Chairman Powell is scheduled to speak at noon next Monday, and markets will be eager to hear his thoughts on Thursday's Consumer Price Index.
They will be hoping that the Governor will say that the Inflation Report makes a cut in the general interest rate in September more likely. If he says so, mortgage rates may fall, but if he doesn't, they will rise.
Other Fed officials are scheduled to speak on Tuesday and Friday next week, and while their words won't carry as much weight as Powell's, they could still influence mortgage rates.
Next week's big economic report will be released on Tuesday, covering June retail sales. Markets are expecting retail sales to fall to -0.2% from 0.1% in May. A lower figure would be desirable to help lower mortgage rates.
Also on Tuesday is the release of the June Import Price Index (IPI), the least important of the price indices when it comes to mortgage rates, and considering the market ignored yesterday’s disappointing Producer Price Index (usually the more important one), we can only hope that it will be ignored as well.
Included on Wednesday's schedule are June industrial production and capacity utilization, which the market expects to fall and we're hoping to see even worse results than those expectations.
As always, we will provide more details about next week's major reports the day before each one is published.
Overview of next week's economic reports and events
See above for details on next week's big economic reports, and an explanation 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 – Speech by the Federal Reserve Chairman, plus the Empire State Manufacturing Survey for July. Tuesday – Retail Sales for June, plus the Import Price Index for June, plus Business Inventories for May, Home Builder Confidence for July, and a speech by Federal Reserve Board Governor Adriana Kugler. Wednesday – Industrial production and capacity utilization for June, plus housing starts and building permits for June. Thursday – Leading economic indicators for June, plus the Philadelphia Fed Manufacturing Survey for July, plus unemployment claims for the week ending July 13th. Friday – Speeches by two senior Federal Reserve officials, New York Fed President John C. Williams and Atlanta Fed President Raphael Bostic.
Next Monday and Tuesday will be key days for mortgage rates to fall or rise.
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Next week's mortgage interest rates forecast
I expect a moderately favorable week for mortgage rates, but there is every chance this could turn out to be wrong.
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 for these things will allow you to win at lower rates.
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,” which means:
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 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.