Mortgage and refinance rates today, Jul. 8, and rate forecast for next week

Today’s mortgage and refinance rates

Average mortgage rates moved moderately lower yesterday. But that wasn’t enough to prevent an appreciable rise happening over the last seven days.

Next Wednesday will bring the consumer price index for June. The CPI is often now often regarded as the most important monthly economic report of all. So, what it says could determine the direction mortgage rates take for weeks to come.

Obviously, I don’t know what the CPI will reveal. But my gut feeling is that mortgage rates might remain elevated over the next seven days.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Things have been especially bad for mortgage rates over the last couple of weeks. And they might get a bit better soon. But I doubt we’ll see any significant and sustained falls until considerably later this year or possibly sometime in 2024.

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

Mortgage rates move up and down all the time. But what we want is to see a sustained and significant drop.

And, absent some extraordinary news, I don’t see one of those on the horizon for several months. How come?

Well, the economic conditions that might bring about such a drop are:

1. Lower inflation
2. A weakening economy
3. Stable or reduced general interest rates

And, right now, none of those looks likely to change enough to bring about that sustained and significant fall in mortgage rates. They probably will eventually, but I’d be surprised if we were to see such a welcome movement before the last (October-December) quarter of this year or sometime in 2024.

This week

This week has been all about employment reports. And they’ve been a mixed bag.

Yesterday’s all-important jobs report did deliver some good news (for mortgage rates) by showing the number of new jobs created in June falling significantly. However, it also revealed that the unemployment rate fell that month and that average hourly earnings held steady, instead of falling as expected.

Markets started off focusing on the bad news but turned around later in the day as the number of new jobs sank in. Still, mortgage rates climbed over the entire week.

Inflation

If this week has been all about employment, next week is all about inflation. There are three price indexes covering June due over the coming seven days:

1. Consumer price index (Wednesday) — The CPI is by far the most important because it shows how the prices we pay moved
2. Producer price index (Thursday) — The PPI shows how prices were moving earlier in the supply chain. So changes are likely to show up in the CPI later
3. Import price index (Friday) — The IPI shows changes in prices for goods landing in U.S. ports. Again, they could end up affecting future CPIs

The CPI and PPI have normal and “core” versions. Core ones show how prices have moved once volatile food and energy prices have been stripped out.

That’s not much use to you and me. But economists reckon it gives a clearer picture of underlying inflation. And core CPI and PPI may affect mortgage rates more than the unadjusted versions of the figures.

Economists polled by MarketWatch expect the CPI to rise a little in June but core CPI to tick lower. That probably won’t be bad for mortgage rates. If it happens.

Economic reports next week

I already covered next week’s biggest reports in the preceding section. The other thing to note is that several top Federal Reserve officials have speaking engagements scheduled during that time.

And markets will be listening carefully for clues about the Fed’s next interest rate announcements, starting on Jul. 26. The more hawkish the speakers are, the more likely mortgage rates will rise.

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.

• Monday — May wholesale inventories. Plus May consumer credit
• Tuesday — June small business optimism index from the National Federation of Independent Business
• Wednesday — June consumer price index
• Thursday — June producer price index. Plus new jobless claims for the week ending Jul. 8
• Friday — June import price index. And July consumer sentiment index (preliminary)

Watch out for Wednesday!

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

Mortgage interest rates forecast for next week

My forecast for the next seven days is that mortgage rates might remain elevated. But, of course, amazingly good inflation reports could change that outlook.

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

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.