Mortgage rates today, Jul. 15, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates inched higher yesterday. However, last week as a whole was a good one for those rates. And they’ve fallen appreciably over the previous seven days.

That was a result of a week full of excellent news about inflation. And, fortunately (though not for me), it made a nonsense of my forecast last week. To be fair, very few were expecting then the sorts of price indexes we got. And I did warn last Saturday that “amazingly good inflation reports could change that outlook.”

Next week has little on the calendar that’s likely to move markets far. So, I’m expecting that mortgage rates might hold close to steady over the next seven days.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Last week was terrific for mortgage rates. But, so far, I’m viewing it as just part of the normal ups and downs of the market.

What I’m hoping for are falls that are both significant and sustained. And I doubt we’ll see those for at least a few months. Let’s hope I’m wrong.

In the meantime, 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

Last week, I listed the economic conditions that might bring about a significant and sustained drop in mortgage rates. Those were:

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

Last week delivered on the first of those and then some. But the other two aren’t looking so good.

The economy has shown remarkable and unexpected resilience. And it’s highly likely (a 93% probability, according to the CME FedWatch tool) that the Federal Reserve will hike general interest rates by 25 basis points (0.25% or a quarter-percentage-point) on Jul. 26.

That’s not to say that this week hasn’t had a positive effect on the outlook for mortgage rates. It might well have.

Fewer rate hikes?

For example, the Fed may well hint on Jul. 26 that it’s less likely to raise general interest rates again this year, which would be helpful. But both it and markets will be acutely aware that a single month’s data aren’t sufficient to draw any conclusions about a possible emerging trend.

On Friday, The Wall Street Journal (paywall) ran a story that began: “The outcome of the Federal Reserve’s July meeting appears to be all but decided: Many officials signaled in recent speeches and interviews that they support a quarter-percentage-point increase that lifts interest rates to a 22-year high. The real debate at the July 25-26 gathering is likely to center on what it would take to prompt another rate hike in September or in the fall. Inflation broadly slowed last month, raising the prospect that the July increase will be the Fed’s final upward move in its inflation fight.”

Soft landing?

Another Journal article, on Thursday, suggested this week’s inflation data improve the chances of a “soft landing.” That would occur were the Fed to bring inflation down to its 2%-a-year target rate without triggering a recession in the process.

But the article’s author, Greg Ip had a couple of caveats. The first concerned this week’s inflation reports: “Much of the latest month’s drop was technical: a surge in prices in June 2022 finally dropped out of the 12-month calculation. Because that won’t be repeated, headline inflation could rise in coming months.”

If the inflation rate doesn’t fall as we’re now hoping, that could force the Fed to keep hiking general interest rates. And that could push the economy into recession.

Lower inflation should bring lower mortgage rates. And a recession normally pushes them lower yet. But we’re far from sure we’ll see one let alone both of those.

Next week

We’ve just had a week of employment reports followed by a week of inflation indexes. And, after all that excitement, we’re due a break.

Next week will probably bring just that. There’s very little on the calendar of economic reports that’s likely to influence mortgage rates much.

The exception is June’s retail sales figures, which are due on Tuesday. Those could be important because they show how the economy’s holding up. Consumer spending accounts for a huge proportion of the American economy.

However, economists are already expecting retail sales to have increased. And that’s already baked into mortgage rates. So, it would likely take a truly exceptional change to move those rates far.

Economic reports next week

As I said, this may well prove a quiet week for mortgage rates. The only economic report that typically has the potential to change them much is Tuesday’s retail sales figures for June.

And we don’t even have the speaking engagements of top Fed officials to contend with. They’re barred from making public comments in the run-up to each of their six-weekly meetings.

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 retail sales. Plus industrial production and capacity utilization for the same month
• Wednesday — June housing starts
• Thursday — June existing home sales. Plus new jobless claims for the week ending Jul. 15

It could be a quiet week.

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

Mortgage interest rates forecast for next week

I’m hoping that mortgage rates next week might be unchanged or barely changed. There’s very little on the calendar that’s likely to move them far. So, if any big movements were to occur, they will probably come as a result of unexpected news.

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.