Today’s Mortgage and Refinance Rates
Average mortgage rates edged up yesterday. But it was the first increase this week. And they are significantly lower than they were last Friday.
So my “barely moving” rate prediction was wrong last week. And now I have to say that mortgage rates next week are unpredictable. However, I should mention that spikes are frequent when periods of appreciable falls wear off. But they are not inevitable.
Find and Lock in a Low Rate (Jul 10, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||2.811%||2.811%||Unchanged|
|Conventional 15 years fixed||2,125%||2,125%||Unchanged|
|Conventional 20 years fixed||2.625%||2.625%||+ 0.13%|
|Conventional 10 years fixed||1,944%||1.984%||+ 0.01%|
|30-year fixed FHA||2.672%||3.326%||+ 0.06%|
|15 years fixed FHA||2,365%||2.965%||-0.07%|
|5/1 ARM FHA||2.5%||3,207%||Unchanged|
|Fixed VA over 30 years||2,258%||2,429%||+ 0.01%|
|VA fixed 15 years||2.25%||2,571%||Unchanged|
|5/1 ARM VA||2.5%||2,386%||Unchanged|
|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 (Jul 10, 2021)
Should you lock in a mortgage rate today?
After a few good weeks for mortgage rates, you might be feeling relaxed. But don’t get too comfortable. The chances of them dropping much more seem slim to me. While an upward rebound seems more likely.
However, the markets have acted strangely recently. It is therefore perfectly possible that you can benefit from it by continuing to float your rate. Don’t complain if you get caught up in climbs. And be ready to lock down anytime.
If I were you I would be careful and lock in now. So my personal recommendations remain:
- LOCK if the closure 7 days
- LOCK if closing 15 days
- LOCK if the closure 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
Well, it’s been a weird week. The markets were suddenly consumed by panic on Wednesday and Thursday. It suddenly dawned on them that the global COVID-19 pandemic was far from over. Perhaps they had already had a false sense of security given that most of the participants had probably already been doubly vaccinated.
There had been a few pieces of economic and medical data that might have aroused their fears. But I didn’t spot any that warranted such a strong reaction. It felt more like a rush. Like when a single horse mistakes a twig for a rattle and scares all the others away.
Of course, that doesn’t mean that there aren’t real economic dangers associated with the pandemic yet. There is. But they’ve been around for – and haven’t changed much in – many months.
Of course, if COVID-19 resurfaces and undermines the US and global economic recovery, mortgage rates would likely drop significantly, possibly setting new all-time lows. And the stock markets would fall in the same way.
Investors would say they were factoring in such a possibility when they traded on Wednesday and Thursday. But why they chose those days is unclear. One theory is that it suddenly occurred to them that the post-COVID recovery could be in the evening.
And it may be, now that stimulus checks have been heavily spent. But new infrastructure spending is in the works. And recent data, with the exception of employment figures, has been quite good.
The Fed remains the big threat to mortgage rates
As the markets slipped out of their hands (hopefully), they were too preoccupied to take into account some important developments from the Federal Reserve. On Wednesday, the Fed released the latest minutes of its key policy-making committee. And they showed that it was starting to move to a point where it could gradually slow down (“cut back”) its asset purchases.
This was confirmed yesterday in an interview with the Financial Times in which Federal Reserve Bank of San Francisco President Mary Daly said, “We are ready to cut when the time is right.
The problem is, those asset purchases include $ 40 billion per month spent on mortgage-backed securities. And this frenzy is keeping mortgage rates artificially low.
Worse yet, if what happened the last time the Fed announced a tap (in 2013) happens again, we could see mortgage rates hovering around 3.5% on average very soon after such an announcement. For the moment, they hover around 2.9% -3%
Economic reports next week
Next week is a heavy one for important economic reports, which are all for June, unless otherwise noted. Inflation is currently one of the great obsessions of the markets. And the Consumer Price Index (CPI) came out on Tuesday, including the core CPI, which is the CPI without volatile food and energy prices. Wednesday sees the publication of the producer price index and Thursday the import price index.
Thursday also brings industrial production and retail sales on Friday. And these could help the markets decide whether they’ve been scared off by a twig or a rattle.
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. Plus, regular readers will know that investors have ignored most economic reports in recent months. Thus, the effects of the following may be different from normal:
- Tuesday – June consumer price index and core CPI
- Wednesday – June producer price index
- Thursday – June import price index. And industrial production in June with capacity utilization. Plus new weekly unemployment insurance claims until July 10
- Friday – June Retail sales and retail sales excluding automobiles. More consumer confidence index in July
After Monday, there is something potentially important every day for the next week.
Find and Lock in a Low Rate (Jul 10, 2021)
Mortgage interest rate forecasts for next week
I’m back to my old cop-out who mortgage rates are essentially unpredictable next week. If you forced me to bet, I’d bet a dime on their modest rise. But, honestly, little would surprise me after last week.
Mortgage and refinancing rates generally move in tandem. But be aware that refinancing rates are currently a little higher than those for purchase mortgages. This spread is likely to remain fairly constant as they change.
Meanwhile, a recent regulatory change has made most mortgages for investment property and vacation homes more expensive.
How your mortgage interest rate is determined
Mortgage and refinance 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 there are five ways you play an important role in determining your own mortgage rate. 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 With A Conventional, FHA, VA, USDA, Jumbo Or Other 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” This is your Pmain (reimburses the amount you borrowed), Iinterest (the loan price), (property) Taxes, and (owners) Iinsurance. 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. Lily:
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 end result is a good overview of the daily rates and how they have changed over time.