Today's mortgage and refinancing rates
Average mortgage rates rose just inches yesterday. But that was the first increase this week. And they are significantly lower than last Friday.
So my prediction of "barely moving" prices was wrong last week. And I have to say that now Mortgage rates next week are unpredictable. I should mention, however, that increases are common when periods of noticeable declines run out. But they are not inevitable.
Find and lock a cheap rate (July 11, 2021)
Current mortgage and refinancing rates
Effective interest rate*
Conventional 30 year celebration year
Conventionally, 15 years of fixed year
Conventional 20 years old
Conventionally fixed for 10 years
30 years permanent FHA
Fixed FTA for 15 years
5/1 ARM FHA
30 years of permanent VA
15 years fixed VA
Prices are provided by our partner network and may not reflect the market. Your rate can be different. Click here for an individual price offer. View our rate assumptions here.
Find and lock a cheap rate (July 11, 2021)
COVID-19 Mortgage Updates: Mortgage lenders are changing interest rates and rules due to COVID-19. Click here to learn how the coronavirus could affect your home loan.
Should You Lock A Mortgage Rate Today?
After a good few weeks on mortgage rates, you may be relaxed. But don't make yourself too comfortable. The chances that they will fall much further seem slim to me. While an upward recovery is more likely.
However, the markets have been acting strange lately. So it is entirely possible that you will benefit from continuing to unblock your installment. Just don't complain if you get caught on climbs. And be ready to lock anytime.
If I were you I would be careful and lock up now. My personal recommendations therefore remain:
LOCK when close in 7th DaysLOCK when close in fifteen DaysLOCK when close in 30th DaysLOCK when close in 45 DaysLOCK when close in 60 Days
With so much uncertainty right now, however, your instincts could turn out to be as good as mine – or better. So let your gut instinct and your personal risk tolerance guide you.
What is driving current mortgage rates?
Well, that was a strange week. Panic suddenly struck the markets on Wednesday and Thursday. It suddenly dawned on them that the global COVID-19 pandemic was far from over. Perhaps they had a false sense of security beforehand as most of the participants were probably already double vaccinated.
There had been some economic and medical data that may have sparked their fears. But I haven't seen anyone that warranted such a sharp reaction. It felt more like a rush. For example, when a single horse mistakes a branch for a rattle and everyone else runs away.
Of course, that doesn't mean that there aren't any real economic dangers from the pandemic. There are. But they have been around for – and have hardly changed – many months.
Of course, if COVID-19 gets its ugly head back and undermines the recovery in the US and the global economy, mortgage rates would likely drop significantly and potentially hit new all-time lows. And the stock markets would collapse in a similar way.
Investors would argue that they priced in such an opportunity when they traded on Wednesday and Thursday. But why they chose these days is unclear. One theory is that they suddenly realized that recovery from COVID-19 might be evening.
And it may be that most of the stimulus checks have now been issued. But new infrastructure spending is in the pipeline. And the latest data, with the exception of the employment figures, has been pretty good.
Fed still the major threat to mortgage rates
While the markets were getting out of their (hopefully) branch, they were too busy to accommodate some key Federal Reserve developments. On Wednesday, the Fed released the latest minutes of its main policy committee. And they showed that it was beginning to move to a point where it could gradually slow ("shorten") its asset purchases.
This was confirmed in an interview in the Financial Times yesterday in which the President of the Federal Reserve Bank of San Francisco, Mary Daly, said, "We are ready to put the throttling in place when the time is appropriate."
The problem is, these asset purchases include $ 40 billion a month spent on mortgage-backed securities. And this Spree keeps mortgage rates artificially low.
Worse, if what happened in the last Fed announcement (in 2013) repeats itself, we could see mortgage rates averaging around 3.5% very soon after such an announcement. At the moment they are in the range of 2.9% to 3%
Economic reports next week
Next week is a tough week for major economic reports, all of which apply to June unless otherwise noted. Inflation is one of the major obsessions in the markets right now. And the index of consumer prices (CPI) will be released on Tuesday, including the core CPI, which is the CPI with volatile food and energy prices. The producer price index is published on Wednesday and the import price index on Thursday.
Thursday also brings industrial production and Friday retail sales. And these could help the markets decide whether they were scared by a twig or a rattlesnake.
None of the other economic reports listed below are unlikely to cause much movement in the markets unless they include shockingly good or bad data. Additionally, regular readers know that investors have ignored most of the economic reports in the past few months. Therefore, the effects of the following may differ from the usual ones:
Tuesday – June Consumer Price Index and Core CPI Wednesday – June Producer Price Index Thursday – June Import Price Index. And June industrial production with capacity utilization. Plus weekly new unemployment insurance claims through July 10th, Friday-June retail sales and retail sales excluding cars. Plus July consumer sentiment index
After Monday, there is something potentially important every day of the next week.
Find and lock a cheap rate (July 11, 2021)
Mortgage rates forecast for next week
I'm back to my old cop out that Mortgage rates are essentially unpredictable next week. If you forced me to place a bet I would put a dime on their modest increase. But to be honest, I wouldn't be much of a surprise after last week.
Mortgage and refinancing rates usually move in parallel. Note, however, that the refinancing rates are currently slightly higher than those for buying mortgages. This gap will likely stay pretty constant as it changes.
Meanwhile, a recent regulatory change has made most investment property and vacation rental mortgages more expensive.
This is how your mortgage rate is determined
Mortgage and refinancing rates are generally determined by prices on a secondary market (similar to the stock or bond markets) that trade mortgage-backed securities.
And that depends heavily on the economy. So mortgage rates are typically high when things are going well and low when the economy is in trouble.
But you play a huge role in determining your own mortgage rate in five ways. You can significantly influence it by:
Rummage For Your Best Mortgage Rate – They Vary A Lot From Lender To Lender Improve Your Credit Score – Even A Small Boost Can Make A Big Difference To Your Interest Rate And Payments Save The Biggest Down Payment You Can – Lenders Like You Real Skin Yourself In This Game 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 Other Loan?
Spending time getting these ducks in a row can win you lower prizes.
Remember, it's not just a mortgage rate
Remember to count all of the upcoming home ownership costs when figuring out how much a mortgage you can afford. So concentrate on your "PITI" This is yours P.rincipal (pays back the amount borrowed), IInterest (the price of borrowing), (property) TAxles and (homeowners) IInsurance. Our mortgage calculator will help you with this.
Depending on your mortgage type and the amount of your down payment, you may also need to pay for mortgage insurance. And that can easily reach three digits every month.
But there are other potential costs as well. So you have to pay community contributions if you choose to live with an HOA. And wherever you live, you have to expect repair and maintenance costs. There is no landlord to call if something goes wrong!
After all, it's hard to forget about closing costs. You can see this in the specified annual percentage rate (APR). Because this effectively spreads it over the term of your loan and is thus higher than your pure mortgage interest.
But you may be able to get help with these 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
The mortgage reports receive daily interest rates based on selected criteria from multiple credit partners. We'll find an average interest rate and an APR for each type of loan shown on our chart. Since we average a range of prices, this will give you a better idea of what you might find in the market. In addition, we determine average interest rates for the same types of credit. Example: FHA fixed with FHA fixed. The end result is a good snapshot of the daily rates and how they change over time.