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Mortgage rates today, July 16 and rate predictions for next week

Today’s Mortgage and Refinance Rates

Average mortgage rates were down yesterday – and all week. But that was more likely to be the result of general volatility than any change in the fundamentals that drive mortgage rate moves. We see a lot of ups and downs, often jagged over consecutive weeks.

I got lucky last week when I mentioned this pattern and suggested, “…if this continues, mortgage rates will drop over the next seven days.” And, on that basis alone, mortgage rates could rise next week. However, I also said that “such unreliable models are a terrible way to make important decisions”. Essentially, there is currently no way to predict how mortgage rates will move from week to week.

Finding and locking in a low rate (July 17, 2022)

Current mortgage and refinance rates

Program Mortgage rate APR* To change
30-year fixed conventional 5.906% 5.942% +0.03%
15-year fixed conventional 5.048% 5.104% -0.11%
20-year fixed conventional 5.727% 5.782% -0.07%
10-year fixed conventional 5.066% 5.171% -0.16%
30-year fixed FHA 5.674% 6.437% -0.12%
15-year fixed FHA 5.247% 5.736% -0.1%
30-year fixed PV 5.313% 5.535% -0.2%
15-year fixed VA 5.16% 5.532% -0.03%
Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.

Finding and locking in a low rate (July 17, 2022)

Should you lock in a mortgage rate today?

Don’t lock in on a day when mortgage rates look set to drop. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. Thus, they do not change daily to reflect fleeting sentiments in volatile markets.

We have seen fewer sudden movements in mortgage rates this week than in previous ones. And that can be a good sign, especially since next week will bring few economic reports that could cause volatility.

There is perhaps more hope now than recently that mortgage rates could soon top or even drop a little. (See below.) But I don’t expect any major or sustained drops any time soon.

So my personal rate lock recommendations remain:

  • TO BLOCK if closing seven days
  • TO BLOCK if closing 15 days
  • TO BLOCK if closing 30 days
  • TO BLOCK if closing 45 days
  • TO BLOCK if closing 60 days

However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, or even better. So let your instincts and personal risk tolerance guide you.

What’s Moving Current Mortgage Rates

We had some good news yesterday when the June retail sales figures were better than expected. But the markets are still worried about the prospect of a recession. In an email newsletter yesterday, Comerica Bank Chief Economist Bill Adams explained why:

“The outlook has deteriorated further over the past month. The University of Michigan’s consumer sentiment indicator and the expectations of small business owners in the National Federation of Independent Business monthly survey both fell to record lows – and a survey of bank CEOs Community surveys conducted by the American Bankers Association show that more than nine out of 10 expect a recession in the next 1 to 2 years. CPI inflation jumped more than expected to a new 40-year high in June, as national gas prices climbed above $5 a gallon and the yield curve – the differential between yields on two-year Treasury bills and ten-year bills – turned negative, a sign that financial markets, like consumers, small business owners and community bankers, see a growing risk of a coming recession.

True, Mr. Adams began the next paragraph, “All is not lost.” And he continued to report happier news. But it is impossible to ignore the warning signs.

Thus, investors continue to face the question that has haunted them for weeks. Are they more afraid of a possible recession (which tends to lower mortgage rates) or runaway inflation (which tends to drive them up)? Most of the volatility we saw in June and July was due to uncertainty around this.

This week, fear of recession dominated. But you can expect inflation to pick up again far too soon.

Recession Doesn’t Always Mean Lower Mortgage Rates

I must point out a fact that I last mentioned a few weeks ago. The highest monthly average mortgage rate on record occurred during a terrible recession. In October 1981, they touched 18.45%.

This recession was particularly severe because the Federal Reserve was aggressively raising interest rates at the time. And mortgage rates were reacting to the Fed rather than the recession. Ring bells?

Of course, the circumstances are very different now. And no one expects mortgage rates to hit such highs this time around. But don’t assume that a recession will necessarily come to the rescue of high mortgage rates. It’s not always the case.

Economic reports next week

After a busy few weeks for economic reports, we need to breathe a little. And next week brings one.

Next week’s reports are unlikely to move the markets much unless they contain surprisingly good or bad data.

  • Monday – National Assoc’s July Homebuilder Index. home builders
  • Tuesday — June Building permits and housing starts
  • Wednesday — June Existing Home Sales
  • Thursday — June Main economic indicators. Plus weekly new claims for unemployment insurance through July 16
  • Friday — July S&P Global Purchasing Managers Indices (PMI) for Services and Manufacturing

Chances are, next week will be a snoozefest for reports.

Finding and locking in a low rate (July 17, 2022)

Mortgage interest rate forecast for next week

I am always hampered by volatility and unpredictability. If you need a prediction of where mortgage rates will go over the next seven days, check your horoscope or flip a coin. They’re about as reliable as I can get right now.

I believe mortgage rates are more likely to rise slightly than fall over the next few weeks. But the next seven days could go either way. And you should expect plenty of up and down movement for a while.

Mortgage and refinance rates generally move in tandem. And the removal of unfavorable market refinancing charges last year has largely eliminated the gap that had grown between the two.

How your mortgage interest rate is determined

Mortgage and refinance rates are typically 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. Thus, mortgage rates tend to be high when things are going well and low when the economy is struggling. But inflation rates can undermine these trends.

Your part

But you play an important role in determining your own mortgage rate in five ways. And you can affect it significantly by:

  1. Shop around for your best mortgage rate – They vary widely from lender to lender
  2. Boost your credit score – Even a small bump can make a big difference to your rate and payments
  3. Save the biggest down payment possible – Lenders like you to have real skin in this game
  4. Keep your other borrowings small — The lower your other monthly commitments, the higher the mortgage you can afford
  5. Choose your mortgage carefully – Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or other loan?

Time spent getting these ducks in a row can earn you lower rates.

Remember it’s not just a mortgage rate

Be sure to factor in all of your homeownership costs when calculating how much mortgage you can afford. So focus on your “PITI”. It’s your Pprincipal (repays the amount you borrowed), IInterest (the price of the loan), (the property) Jaxes, and (owners) Iinsurance. Our mortgage loan calculator can help you.

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 hit three figures every month.

But there are other potential costs. So you will 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 when things go wrong!

Finally, you will have a hard time forgetting closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because it spreads them effectively over the term 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 every 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 APR for each loan type to display in our chart. Because we average a range of prices, it gives you a better idea of ​​what you might find in the market. In addition, we average rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good overview of the daily rates and their development over time.