Today’s mortgage and refinance rates
Average mortgage rates were down yesterday — and over the entire week. But that was more likely to be a result of general volatility than any shift in the fundamentals that drive mortgage rate changes. We’re seeing a lot of ups and downs, often seesawing over consecutive weeks.
I got lucky last week when I mentioned that pattern and suggested, ” … if it continues, mortgage rates would fall over the next seven days.” And, solely on that basis, mortgage rates might rise next week. However, I also said that “such unreliable patterns are a terrible way to make important decisions.” Essentially, there’s currently no way to predict where mortgage rates will move week by week.
Find and lock a low rate (Jul 16th, 2022)
Current mortgage and refinance rates
| Program | Mortgage Rate | APR* | Change |
|---|---|---|---|
| Conventional 30 year fixed | 5.906% | 5.942% | +0.03% |
| Conventional 15 year fixed | 5.048% | 5.104% | -0.11% |
| Conventional 20 year fixed | 5.727% | 5.782% | -0.07% |
| Conventional 10 year fixed | 5.066% | 5.171% | -0.16% |
| 30 year fixed FHA | 5.674% | 6.437% | -0.12% |
| 15 year fixed FHA | 5.247% | 5.736% | -0.1% |
| 30 year fixed VA | 5.313% | 5.535% | -0.2% |
| 15 year fixed VA | 5.16% | 5.532% | -0.03% |
| Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here. | |||
Find and lock a low rate (Jul 16th, 2022)
Should you lock a mortgage rate today?
Don’t lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.
We saw fewer sharp movements in mortgage rates this week than in previous ones. And that may be a good sign, especially as next week brings few economic reports that might cause volatility.
There may be more hope now than recently that mortgage rates might soon plateau or even fall a little. (See below.) But I’m not expecting any significant or sustained falls anytime soon.
So, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 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
We had some good news yesterday when June’s retail sales figures came in better than expected. But markets are still preoccupied with the prospect of a recession. In an e-newsletter yesterday, Comerica Bank Chief Economist Bill Adams explained why:
“The outlook worsened further over the last month. The University of Michigan’s Consumer Sentiment Indicator and expectations of small business owners in the National Federation of Independent Business’s monthly survey have both fallen to record lows — and a survey of community bank CEOs conducted by the American Bankers Association shows more than nine in 10 expect a recession over the next 1-2 years. CPI inflation jumped more than expected to a new 40-year high in June as national gas prices soared above $5 per gallon, and the yield curve — the differential between the yields on two-year Treasury notes and ten-year notes — turned negative, a sign that financial markets, like consumers, small business owners, and community bankers, see rising risk of a recession ahead.”
True, Mr. Adams began the following paragraph, “All is not lost.” And he went on to report more cheerful news. But it’s impossible to ignore the warning signs.
So, investors continue to face the question that’s dogged them for weeks. Are they more scared of a possible recession (which tends to pull mortgage rates lower) or of rampant inflation (that tends to push them higher)? Most of the volatility we’ve seen through June and July has been down to uncertainty over that.
This week, a fear of recession dominated. But you can expect inflation to retake the lead all too soon.
Recession doesn’t always mean lower mortgage rates
I need to point out a fact that I last mentioned some weeks ago. The highest monthly average mortgage rate on record occurred during a terrible recession. In October 1981, they touched 18.45%.
That recession was particularly bad because the Federal Reserve was aggressively hiking interest rates at the time. And mortgage rates were responding to the Fed rather than the recession. Ring any bells?
Of course, the circumstances are very different now. And nobody’s expecting mortgage rates to get close to such heights this time. But don’t assume a recession will necessarily ride to the rescue of high mortgage rates. That’s not always the case.
Economic reports next week
After some heavy weeks for economic reports, we’re due a breather. And next week brings one.
Next week’s reports are unlikely to move markets much unless they contain shockingly good or bad data.
- Monday — July homebuilders’ index from the National Assoc. of Home Builders
- Tuesday — June building permits and housing starts
- Wednesday — June existing home sales
- Thursday — June leading economic indicators. Plus weekly new claims for unemployment insurance to Jul. 16
- Friday — July S&P Global purchasing managers’ indexes (PMIs) for the services and manufacturing sectors
Chances are, next week will be a snoozefest for reports.
Find and lock a low rate (Jul 16th, 2022)
Mortgage interest rates forecast for next week
I’m still hobbled by volatility and unpredictability. If you must have a prediction for where mortgage rates will go over the next seven days, check your horoscope or flip a coin. They’re roughly as reliable as I can be at the moment.
I believe that mortgage rates are more likely to gently rise than fall over the next several weeks. But the next seven days could go either way. And you should expect plenty of up-and-down movements for some time to come.
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.
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 inflation rates can undermine those tendencies.
Your part
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.
