Mortgage and refinance rates today, Jun. 24, and rate forecast for next week

Today’s mortgage and refinance rates

Average mortgage rates edged lower yesterday. And, after ups and downs, ended the week just a tiny bit lower than they started it. I’ll take that as a win for my “close to unchanged” prediction seven days ago.

Next week is less predictable. The first four days of it are likely to be similar to this week, with just minor rises and falls. But next Friday brings a crucial inflation report.

And that could move those rates either way. So, for my weekly forecast, I can only say mortgage rates are unpredictable over the next seven days.

And that uncertainty is only heightened by news emerging out of Russia this morning. Reuters reports: “Mutinous Russian mercenary fighters barreled toward Moscow on Saturday after seizing a southern city overnight, with Russia's military firing on them from the air but seemingly incapable of slowing their lightning advance.” Keep reading to find out how this could affect mortgage rates.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

It’s improbable that next Friday’s inflation report will send mortgage rates significantly lower for a sustained period. Indeed, I doubt any economic report will do that over the next two or three months, possibly longer.

So, my personal rate lock recommendations remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• LOCK if closing in 30 days
• LOCK if closing in 45 days
• LOCK if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

What’s moving current mortgage rates

News flash

The sections following this one were written before breaking news from Russia about what looks suspiciously like an attempted, armed coup d’état. It’s much too soon to guess how this might affect markets and mortgage rates on Monday morning.

But, typically, the sorts of uncertainty generated by such an important geopolitical event tend to push stock markets sharply lower and raise demand for bonds. And that’s usually good for mortgage rates.

However, when this was written, there was no way of knowing the level of threat the Putin regime faces. Perhaps the whole thing will be over by the time markets get to react.

But it may not be. And were the rebel leader Yevgeny Prigozhin to become Russia’s next president, that could well be seen as creating greater instability. Some regard President Vladimir Putin as the saner of the two. And, to repeat, uncertainty is often good for mortgage rates.

In the future, we’ll be covering events in Russia closely for as long as they’re likely to affect mortgage rates. In the meantime, you might wish to hold off locking yours.

Recession

Our best hope for lower mortgage rates is a recession. Mortgage rates tend to fall when the economy’s underperforming and when inflation is low.

Recessions almost always drive out inflation by lowering demand. And, of course, an economy in recession is one that’s underperforming.

Many economists have been forecasting a U.S. recession “in a few months” for more than a year now. But a surprisingly buoyant economy keeps confounding their predictions. In particular, employment and growth in gross domestic product (GDP) and retail sales keep surprising us with their resilience.

Meanwhile, the inflation rate has undoubtedly fallen. But it’s still a long way off the level that would make the Federal Reserve comfortable.

And, just this week, Fed Chair Jerome Powell told lawmakers that he expected more hikes (plural) to general interest rates later this year. Unfortunately, higher general interest rates are another thing that drives mortgage rates higher.

Change — but when?

Only a few months ago, I was siding with those economists who thought we’d enter a recession sometime in the summer. But that’s looking unlikely now.

Personally, I reckon we may well see one later this year: in the fall or early winter. But that’s far from certain.

Still, I suspect we will see lower mortgage rates at some time in the next six months or so. They might be a result of a recession or they could flow from lower inflation alone. A combination of the two would probably see the biggest fall in those rates.

But let’s be realistic here. Few expect to see the record low (2.65% mortgage rate set in January 2021) again for a long time, possibly ever. It’s much more likely they’ll fall to 5.x% or, if we’re lucky, 4.x%.

And all of this is speculation. I never resist the temptation to repeat my favorite quote from the late Harvard economist John Kenneth Galbraith: “The only function of economic forecasting is to make astrology look respectable.”

Next Friday’s inflation report

Next Friday brings May’s personal consumption expenditures (PCE) price index. That’s probably not as important as the consumer price index (CPI) but it is the Fed’s preferred measure of inflation.

Economists are expecting both parts of the index to fall. Those parts are the straight PCE and the “core” PCE, which is the straight one with volatile food and energy prices stripped out.

If the PCE index does fall appreciably, that should be good news for mortgage rates. But if it rises, or falls less than expected, that could drive mortgage rates higher.

Economic reports next week

This week was a decidedly quiet one for important economic reports (there were none) and for mortgage rates. The first four days of next week may be the same. But the fifth brings one of the three most important monthly economic reports, the PCE price index (see above). And that’s more than capable of moving mortgage rates.

In the following list of next week’s reports, only those in bold are likely to affect mortgage rates much. The others probably won’t have much impact unless they contain shockingly good or bad data.

• Tuesday — June consumer confidence. Plus May new home sales and April’s home price index from S&P Case-Shiller
• Wednesday — Fed Chair Jerome Powell has a speaking engagement
• Thursday — Fed Chair Jerome Powell has another speaking engagement. Plus pending home sales for May and initial jobless claims for the week ending Jun. 24
• Friday — May PCE price index. Plus June consumer sentiment

It’s probably going to be another quiet week up until Friday. Then there’s the possibility of some change with the PCE inflation report. Fed Chair Jerome Powell has a couple of speaking engagements on Wednesday and Thursday. But he’s been vocal recently and is unlikely to move mortgage rates far unless his thinking has evolved over the previous few days.

Time to make a move? Let us find the right mortgage for you

Mortgage interest rates forecast for next week

I’m expecting a quiet four days at the start of next week but things could liven up on Friday. Unfortunately, I don’t know what that day’s PCE report will say. So, I can't predict where mortgage rates will move next week.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble. But inflation rates can undermine those tendencies.

Your part

But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:

1. Shopping around for your best mortgage rate — They vary widely from lender to lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
5. Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?

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

Remember, they’re not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So, focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So, you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that rate higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2023

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Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.