Mortgage Charges At this time, July 17, & Price Forecast For Subsequent Week
Today’s mortgage and refinancing rates
Average mortgage rates fell unexpectedly yesterday. And for a worthwhile amount. They are still a long way from their all-time low in January. But they are getting closer and closer.
Read on for why CNBC spoke yesterday of the current “mystifying bond market behavior” that is keeping bond yields (and therefore mortgage rates) low when they would normally rise. But I am one of those who are confused. And so I am forced to keep saying that Mortgage rates next week are unpredictable.
Find and lock a cheap rate (July 18, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,811%||2,811%||Unchanged|
|Conventionally fixed for 15 years||2.125%||2.125%||Unchanged|
|Conventional 20 years old||2,625%||2,625%||Unchanged|
|Conventionally 10 years fixed year||1,945%||1.965%||-0.01%|
|30 years permanent FHA||2,681%||3,336%||+ 0.04%|
|15 years fixed FTA||2,521%||3.122%||+ 0.04%|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 years of permanent VA||2.25%||2,421%||Unchanged|
|15 years fixed VA||2.25%||2,571%||Unchanged|
|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 18, 2021)
COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To learn how the coronavirus could affect your home loan, click here.
Should You Lock A Mortgage Rate Today?
Mortgage rates are falling to recent lows and are less than a million miles from their all-time low in January. And right now there are few signs of the surge I’ve been forecasting for some time. So you can choose to keep your interest rate fluctuating.
However, the forces that were supposed to be driving mortgage rates up have not gone away. And they could step in at any time. So avoid complacency and be ready to lock down at any time.
All of this is too complicated to include in my simplified lock-or-float advice below. My personal recommendations therefore remain:
- LOCK when close in 7th Days
- LOCK when close in fifteen Days
- LOCK when close in 30th Days
- LOCK when close in 45 Days
- LOCK 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 yourself be guided by your gut instinct and your personal willingness to take risks.
What is moving the current mortgage rates
I’ve had a lot of balls on my face lately because the mortgage rate hikes I predicted didn’t materialize. So yesterday I was cheered when CNBC reported that “the bond market defies Wall Street forecasters” with its “mystifying” behavior. So I am not alone. It’s never fun to be alone.
The bond market is not following the script many expected this summer that interest rates would rise due to a booming economy. Instead, longer-term government bond yields are falling, and that can be a warning to the economy.
– CNBC, “The Bond Market’s Mystifying Behavior Could Last All Summer,” July 16, 2021
This is important because mortgage rates often overshadow the returns on 10-year Treasury bills. And they have been doing that recently.
Why this strange behavior?
CNBC suggested a few reasons for the bizarre behavior:
- Investors position themselves strategically to take advantage of future events
- Inflation could force the Federal Reserve to end its bond purchases and raise interest rates earlier than planned
- Technical Reasons – Mostly that some investors are “covering short positions” which means they are making new bets to hedge against old ones coming back to bite them
- A Potential Growth Peak – Some believe the economic recovery has peaked and is now slowing
The article’s headline speculated that this strange behavior “could last all summer”. And it could. But none of these reasons (except No. 2) seem to me to be necessarily so permanent.
For example, Comerica Bank’s weekly e-mail economic newsletter began yesterday: “This week’s US economic data coincided with very strong real GDP”. [gross domestic product] Second quarter growth. ”And yesterday’s June retail sales numbers were much better than expected. So it is possible for recovery to slow down, but there is no clear reason to believe it.
But of course the possibility of inflation (a by-product of the boom) forcing the Fed to cut back on its asset purchases remains very much alive. Although Fed Chairman Jerome Powell did a masterly job of reassuring lawmakers on Capitol Hill (and the markets) earlier this week, the markets can only believe him as long as inflation data supports his account.
And if the Fed cuts its bond purchases, we are likely to see a sharp rise in mortgage rates. Because that happened the last time.
Economic reports next week
After a tough couple of weeks for economic reports, a light one was due. And here it is.
None of the economic reports listed below are likely to create 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:
- Monday-July National Association of Home Builders Index
- Tuesday – June building permits and start of construction
- Thursday – June Sale of existing homes. And June index of leading economic indicators. Plus weekly new unemployment insurance claims until July 17th
- Friday – July Markit’s Manufacturing and Services Sector Purchasing Managers’ Indices (PMIs)
Chances are, you can doze off on this week’s economic reports. Markets are likely.
Find and lock a cheap rate (July 18, 2021)
Mortgage rates forecast for next week
Given that I am among the mystified (noted above) of recent market behavior, forgive me for sticking with it: Mortgage rates are essentially unpredictable next week. I will come back to the correct predictions when I am clear about what is happening.
Mortgage and refinancing rates usually move in parallel. Note, however, that the refinancing rates are currently slightly higher than those for buying mortgages.
However, yesterday’s regulatory announcement means the loophole should go away by August 1st. Or maybe even earlier.
This is how your mortgage rate is determined
Mortgage and refinance 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 huge roles in determining your own mortgage rate in five ways. You can significantly influence it by:
- Find your best mortgage rate – they vary widely from lender to lender
- Boost Your Credit Score – Even a small increase can make a big difference to your rate and payments
- Save the Biggest Down Payment possible – lenders like you to have real skin in this game
- Keep Your Other Borrowings 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?
The time you spend getting these ducks in a row can result in you winning lower prizes.
Remember, it’s not just a mortgage rate
Make sure to count all of your upcoming home rental 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 type of mortgage 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!
Eventually, you will find it hard to forget about closing costs. You can see this in the specified annual percentage rate (APR). Because this effectively spreads it out over the life of your loan and makes it higher than your pure mortgage rate.
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 report receives interest rates from several credit partners on a daily basis according to selected criteria. 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 rates for the same types of credit. For example FHA fixed with FHA fixed. The end result is a good snapshot of the daily rates and how they change over time.