Today’s Mortgage and Refinance Rates
Average mortgage rates were flat yesterday. Yes, they are now high by 2020-21 standards. But look back and they stay ridiculously low.
I shouldn’t be surprised if mortgage rates go up next week. But that’s what I thought seven days ago. And they actually fell, but only a little. If anything, next week is even more unpredictable. Read on to find out why.
Find and Lock in a Low Rate (Oct 30, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||3.22%||3,239%||-0.03%|
|Conventional 15 years fixed||2.6%||2,631%||-0.06%|
|Conventional 20 years fixed||2.989%||3.022%||-0.06%|
|Conventional 10 years fixed||2,514%||2.57%||-0.03%|
|30-year fixed FHA||3,209%||3.97%||-0.06%|
|15 years fixed FHA||2,566%||3.21%||-0.04%|
|5/1 ARM FHA||2.65%||3,201%||-0.07%|
|Fixed VA over 30 years||3.118%||3.311%||-0.03%|
|VA fixed 15 years||2.774%||3,124%||-0.05%|
|5/1 ARM VA||2,612%||2,421%||-0.04%|
|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 (Oct 30, 2021)
Should you lock in a mortgage rate today?
I would lock in my mortgage rate if I were you. Because, in my opinion, the forces trying to push these rates up are still strong. And those who want to lower them are relatively weak. Read on for more details.
Of course, that could change. But it would probably take something catastrophic to bring about a quick and fundamental turnaround. And that doesn’t seem likely right now.
Anyway, my personal recommendations 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
The big event for mortgage rates next week could turn out to be the much-anticipated Federal Reserve announcement on Wednesday, November 3, that it will start “cutting back on its quantitative easing programs.” To do what?
It just means it will start cutting some programs, including one that has kept mortgage rates artificially low since the pandemic began to hit.
For a few months, I thought it might drive up mortgage rates. Because that’s what happened the last time the Fed cut a similar program, in 2013. But now I expect Wednesday’s announcement to be a bit of a wet firecracker.
Yes, there could be a market reaction from either side of the Fed’s statement on Wednesday (2 p.m. ET) and the press conference 30 minutes later. But, this time around (and unlike 2013), the central bank made its intentions clear well in advance.
And the recent mortgage rate hikes were probably in anticipation of the announcement. So the pain has spread and the worst is perhaps already behind us.
Of course, there is always an outside chance that the Fed will delay its announcement, perhaps until its next meeting in mid-December. But he made his intention to do so on November 3 so clearly that any delay would fall somewhere between mischievous and perverted.
The Fed Alone Won’t Stop Rising Mortgage Rates
As I said, the Fed’s announcement may have only a limited effect on mortgage rates. But two other forces remain powerful.
The first is inflation. It continues to be hot, long after many expected it to cool down. And there is still no sign of that changing anytime soon.
When investors buy mortgage bonds (“mortgage-backed securities,” which largely determine mortgage rates), they are buying fixed income. And, right now, inflation is higher than that income. A loss in real terms is therefore included. You can’t fault them for wanting higher yields, which means higher mortgage rates.
The second factor driving mortgage rate hikes is falling new infection rates for COVID-19. The low mortgage rates over the past 19 months are almost entirely – although sometimes indirectly – due to the pandemic. So you can see why a weakening of the coronavirus could translate into higher rates.
But note that over the past few days the infection rate has increased slightly. And some fear a new wave this winter. If this materializes, it should ease some pressure on mortgage rates. But at an appalling cost.
Economic reports next week
It’s a big week for economic reports. And most important of all is the report on the employment situation next Friday. Analysts hope it will be better than last month. But we will have to wait to see. Some see ADP’s Wednesday employment report as an indicator of the official report. So that too could cause waves.
There are also some indexes for the manufacturing and services sector from the Institute for Supply Management (ISM) on Monday and Wednesday respectively. And investors take them seriously as indicators of the economy’s performance.
But 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 – October ISM manufacturing index and construction expenses for September
- Wednesday – Fed statement and press conference (see above). More ADP Employment Report and ISM Services Index, both for October
- Thursday – Productivity and unit labor costs for the third quarter. No more new weekly unemployment insurance claims until October 30
- Friday – October employment situation report, including the non-farm payroll, the unemployment rate and the average hourly wage
Attention Wednesday and Friday.
Find and Lock in a Low Rate (Oct 30, 2021)
Mortgage interest rate forecasts for next week
Again i think mortgage rates could rise next week. Yes, I was wrong last week when I predicted the same. However, in my defense I said, “But we’re probably going to have a little drop as an adjustment very soon. And there’s still a chance that will happen over the next seven days.
I also don’t know how these rates will develop next week. But I still expect them to increase overall in the coming weeks and months.
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 recent regulatory change 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.