Today’s Mortgage and Refinance Rates
Average mortgage rates rose again yesterday. Thank goodness the increase was much smaller than that of Thursday. Still, those Friday night rates were about 10 basis points (a basis point is a hundredth of 1%) higher than they were a week earlier.
I suppose that mortgage rates will rise again next week. But with so much new volatility, it’s really a guess.
Find and Lock in a Low Rate (Sep 25, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||3.105%||3,124%||-0.01%|
|Conventional 15 years fixed||2.458%||2.486%||+ 0.01%|
|Conventional 20 years fixed||2.98%||3.014%||-0.04%|
|Conventional 10 years fixed||2,394%||2.452%||Unchanged|
|30-year fixed FHA||3.107%||3.867%||Unchanged|
|15 years fixed FHA||2.52%||3,164%||+ 0.02%|
|5/1 ARM FHA||2,418%||3.068%||+ 0.04%|
|Fixed VA over 30 years||2.93%||3,121%||-0.04%|
|VA fixed 15 years||2.679%||3.028%||Unchanged|
|5/1 ARM VA||2,537%||2.312%||+ 0.02%|
|Prices are provided by our network of partners and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our pricing assumptions here.|
Find and Lock in a Low Rate (Sep 25, 2021)
COVID-19 Mortgage Updates: Mortgage lenders change rates and rules due to COVID-19. To see the latest information on the impact of the coronavirus on your home loan, click here.
Should you lock in a mortgage rate today?
Yes, I suggest you lock in your mortgage rate very soon. Of course, there will be ups and downs in the days and weeks to come.
But the forces lined up against low mortgage rates seem much stronger and more likely to be successful than those that might push them down. (Read on for my reasons.)
My personal recommendations therefore remain:
- LOCK if closing 7 days
- LOCK if closing 15 days
- LOCK if closing 30 days
- LOCK if closing 45 days
- LOCK if closing 60 days
However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, if not better. So let your instincts and your personal risk tolerance guide you.
What changes current mortgage rates
Last week, I reported that 30-year fixed-rate mortgage rates had risen 10 basis points over the previous seven days, according to Mortgage News Daily (MND) records. And this week, they did the same, going from 2.93% to 3.13% in nine calendar days.
Maybe we can call it a short term uptrend. But it is not a sufficiently established program to draw conclusions from it.
Reason for the increase
Most commentators are happy to attribute the recent increases to the latest meeting of the Federal Reserve’s monetary policy body, the Federal Open Market Committee (FOMC). It ended on Wednesday with the issuance of a statement and the organization of a press conference. Read 2% Mortgage Rates Could Disappear “Soon”, Per Fed Meeting For The Truth On This.
And these commentators are correct that the main driver of the rate hike was probably these events at the Fed. But there were others, perhaps most notably the unexpected slowdown in COVID-19 infection rates.
The New York Times (paywall) reported that in the 14 days ending September 24, the number of new cases in the United States fell 16%. And they’re down 14% globally over that time.
This is an important thing for the markets. One of the reasons mortgage rates have been so low is that investors bought mortgage-backed securities (MBS – a type of bond that largely determines these rates) to hedge against the economic consequences. of the pandemic. And, as fears subside, they are likely to sell some of their MBSs, pushing rates up.
Meanwhile, there is another factor that could drive mortgage rates higher. And this is the political feud brewing on Capitol Hill over the debt ceiling. If this is not resolved within weeks, the US government will default on its debts for the first time in history. And that will almost certainly make all forms of borrowing (including mortgages) more expensive.
Could mortgage rates fall further?
Of course, mortgage rates may fall further. But that seems increasingly unlikely.
Certainly, it is inevitable that they will go up and down on certain days. And we can have longer drop plates.
But I doubt we are approaching 2021 lows no matter what happens to the pandemic. Well, almost no matter what. A new, ultra-virulent and highly infectious variant of SARS-CoV-2 that imposes long-term lockdowns globally may well take mortgage rates to new all-time lows. But let’s hope it’s unlikely.
As well as other possible triggers of sustained and lower mortgage rates. They range from war to extremely serious natural disasters and beyond. Yes possible. But unlikely.
And weighing the possible risks and rewards is what it takes to decide when to lock in your mortgage rate. Yes, you could be wrong because none of us can see into the future. But this process of weighing is more likely to help you than to act blindly. And it’s easier to take advantage or live with the consequences of your decision later.
Economic reports next week
There are some important economic reports next week, Friday bringing the main ones. But I guess their impact will be barely noticeable among the aftershocks of the Fed meeting, the noise of the debt ceiling row, and the brighter outlook for COVID-19.
None of the other economic reports listed below are likely to cause much movement in the markets unless they include some incredibly good or bad data:
- Monday – August durable goods and equipment orders
- Tuesday – July S&P Case-Shiller Home Price Index and September Consumer Confidence Index
- Thursday – New weekly unemployment insurance claims until September 25
- Friday – Core inflation in August, real disposable income and real consumer spending. In addition, August construction expenses. Plus the Institute for Supply Management (ISM) manufacturing index for September. And the consumer confidence index for September
There’s a lot going on on Friday. But will investors notice it against all the background noise?
Find and Lock in a Low Rate (Sep 25, 2021)
Mortgage interest rate forecasts for next week
My best guess is that mortgage rates will rise again this week, but likely only moderately. But, given the recent volatility, that’s really just a guess.
Mortgage and refinancing rates generally move in tandem. And a growing gap between the two has been largely eliminated by the recent removal of unfavorable refinancing fees from the market.
And another regulatory change, announced this week, has likely made mortgages for investment property and vacation homes more accessible and less expensive.
How your mortgage interest rate is determined
Mortgage and refinancing rates are generally determined by prices in a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.
And it depends heavily on the economy. Mortgage rates therefore tend to be high when things are going well and low when the economy is struggling.
But you play an important role in determining your own mortgage rate in five ways. And you can significantly affect it by:
- Find Your Best Mortgage Rate – They Vary Dramatically From Lender to Lender
- Increase Your Credit Score – Even a Small Bump Can Make a Big Difference in Your Rate and Payments
- Save the Biggest Down Payment Possible – Lenders love you to have real skin in this game
- Keep your other loans small – The lower your other monthly commitments, the larger the mortgage you can afford
- Choosing Your Mortgage Carefully – Are you better off with a conventional, FHA, VA, USDA, jumbo or whatever loan?
The time spent getting those ducks in a row can earn you lower rates.
Remember, it’s not just a mortgage rate
Be sure to count all of your upcoming homeownership costs when determining how much mortgage you can afford. So focus on your “PITI”. It’s your Pmain (reimburses the amount you borrowed), Iinterest (the loan price), (property) Taxes, and (owners) Iassurance. Our mortgage calculator can help.
Depending on the type of mortgage you have and the amount of your down payment, you may also need to pay for mortgage default insurance. And that can easily reach three digits each month.
But there are other potential costs. You will therefore have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repair and maintenance costs. There is no owner to call in case of a problem!
Finally, you will have a hard time forgetting the closing costs. You can see which are reflected in the Annual Percentage Rate (APR) that will be shown to you. Because it effectively spreads them out over the life of your loan, making it higher than your normal mortgage rate.
But you may be able to get help with those closing costs. and your down payment, especially if you are a first-time buyer. Read:
Down payment assistance programs in each state for 2021
Mortgage rate methodology
Mortgage Reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and an APR for each type of loan to display in our graph. Because we average a range of rates, it gives you a better idea of what you might find in the market. In addition, we average the rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good overview of daily rates and how they have changed over time.