Today's mortgage and refinance rates
Average mortgage rates rose yesterday. This week there has been a lot of daily ups and downs. Overall, however, the increase was quite modest.
Nevertheless, the cumulative increases in recent months have taken their toll. In fact, the Mortgage News Daily was forecasting its highest level in a year yesterday. And right now they seem to keep climbing. So I expect that Mortgage rates will rise again slightly next week.
Find and lock a low rate (March 14, 2021)
Current mortgage and refinancing rates
Conventional set for 30 years
Conventional 15 years fixed
Conventional set for 20 years
Conventional 10 years fixed
Fixed FTA for 30 years
Fixed FTA for 15 years
5 years ARM FHA
30 years permanent VA
15 years fixed VA
5 years ARM VA
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Find and lock a low rate (March 14, 2021)
COVID-19 Mortgage Updates: Mortgage lenders are changing interest rates and rules due to COVID-19. For the latest information on how coronavirus is affecting your home loan, click here.
Should You Lock A Mortgage Rate Today?
The trend in mortgage rates has been positive so far this year. And I currently see no reason to believe that it will suddenly be reversed. Of course, such a reversal is not impossible; just unlikely.
So my recommendations remain:
LOCK when you approach 7th DaysLOCK when you approach 15th DaysLOCK when you approach 30th DaysLOCK when you approach 45 DaysLOCK when you approach 60 Days
With so much uncertainty right now, however, your instincts could easily prove to be as good as mine – or better. So let your gut and your personal risk tolerance guide you.
What is driving current mortgage rates?
It was the economic impact of the pandemic that caused mortgage rates to drop to several new lows over the past year. And it is the prospect of post-pandemic recovery that is now propelling them.
This week this recovery has received two serious impulses. First, the $ 1.9 trillion American Rescue Plan Act of 2021 became law. That should flood the economy with cash, much of which is quickly spent.
Second, President Joe Biden revealed his schedule for the vaccine launch. Every American adult should have access to one by May 1st. And there is hope that life will be almost back to normal by July 4th. Meanwhile, COVID-19 numbers for new cases, hospitalizations and deaths keep falling.
The economic recovery therefore seems to be becoming more and more certain and will come sooner than previously expected. And that means safer mortgage rate hikes faster than we once thought.
Fears of inflation are disappearing
Last week we discussed investor fears that future inflation could further fuel mortgage rate hikes. However, those fears disappeared mid-week when the consumer price index for February was released. This showed lower inflation this month than most analysts expected.
However, those fears could reappear as quickly as they disappeared. And if they do, they are likely to accelerate the rise in mortgage rates.
Nothing is safe
Although everything looks fair for recovery right now, something is happening. And nobody knows what the future will bring.
For example, some economists think that the stock market is in the bubble zone. And if that failed, we could see lower mortgage rates.
More frightening is the possible emergence of a vaccine-resistant variant of SARS-CoV-2, the virus that causes COVID-19. Scientists seem confident that they can quickly revise existing vaccines to counter such a case. But it would take some time to implement. And that would cause the recovery to stall and likely lower mortgage rates.
Both (and there are others) are possibilities rather than probabilities. And the smart money for rest is fine. Hence, I wouldn't recommend using it as an excuse to delay your mortgage rate freeze.
Economic reports next week
Tuesday is the big day for next week's economic reports. The figures for retail sales and industrial production are available on that day.
But Wednesday is also important for the markets. Because Federal Reserve Chairman Jerome Powell is going to have a 2:30 p.m. (ET) Press conference after the last meeting of the main Fed Policy Committee, the Federal Open Market Committee (FOMC). Investors may well react to what was said there and in the documentation released 30 minutes earlier.
The markets could shake off other reports this week. However, data can have an impact if it deviates significantly from expectations.
Here are next week's key economic reports:
Tuesday – February retail sales and industrial production Wednesday – February start of construction and building permits. Plus this FOMC press conference and publication Thursday – Weekly New Unemployment Insurance Claims.
Typically, the markets react to unexpectedly good news with higher mortgage rates. You usually see lower rates when the numbers are bad. But it takes a lot to get them far.
Find and lock a low rate (March 14, 2021)
Mortgage rates forecast for next week
It has been a groundhog for mortgage rates in recent months: most small increases easily outweigh most small falls. And I don't expect that to change this week.
Mortgage and refinance rates usually move together. Note, however, that refinancing rates are currently slightly higher than those for purchase mortgages. This gap is likely to remain constant as it changes.
How is your mortgage rate determined?
Mortgage and refinancing rates are generally determined by the prices on a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.
And that depends a lot on the economy. Therefore, mortgage rates are typically high when things are going well and low when the economy is in trouble.
However, they play a huge role in determining your own mortgage rate in five ways. You can significantly affect it by:
Shopping for Your Best Mortgage Rate – They vary widely from lender to lender. Boost your credit score. – Even a small bump can make a big difference to your interest rate and payments. Save the biggest deposit you can. – Lenders want you to have real skin in this game of your other borrowing modest – The lower your other monthly obligations, the higher the mortgage you can afford. Choose your mortgage carefully. – Are you better off with a conventional, FHA, VA, USDA, Jumbo, or any other loan?
If you spend these ducks in a row you can win lower rates.
Remember, it's not just a mortgage rate
Take into account all of your upcoming home ownership costs when figuring out what a mortgage you can afford. So concentrate on your "PITI" P.rincipal (pays out the borrowed amount), Interest (the price of borrowing), (property) T.Axes and (homeowners) IInsurance. Our mortgage calculator can help you with this.
Depending on your type of mortgage and the amount of your down payment, you may also need to purchase mortgage insurance. And that can easily reach three digits every month.
But there are other potential costs. So you have to pay homeowners association membership fees if you choose to live with an HOA anywhere. And wherever you live, you should expect repair and maintenance costs. There is no landlord who can call if something goes wrong!
After all, you have a hard time forgetting about closing costs. You can see this in the Annual Percentage (APR) that you will provide. Because this effectively spreads it out over the life of your loan and makes it higher than your direct mortgage rate.
However, you may be able to get help with these closing costs and your down payment, especially if this is your first time buyer. Read:
Down payment assistance programs in each state for 2021
Mortgage rate method
The mortgage reports receive interest rates based on selected criteria from multiple credit partners on a daily basis. We'll find an average rate and an annual interest rate for each type of loan that we want to show on our chart. Since we calculate a series of average prices, this will give you a better idea of what you might find in the market. We also calculate average interest rates for the same types of loans. For example, FHA was fixed with FHA. The end result is a good snapshot of the daily rates and how they change over time.