Mortgage rates today, Jul. 29, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates moved moderately lower yesterday. But, across the last seven days, they nudged a bit higher.

Next week is again a toss-up. It’s another seven days packed with data that could go either way. But, with a gun to my head, I’d guess mortgage rates might edge higher next week. Unfortunately, I have little confidence in that prediction.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

We need a weakening economy and slowing inflation to stand much chance of seeing lower mortgage rates anytime soon. Inflation’s looking good, though some think we might be in for a rise in the rate soon. But the economy is surprisingly strong.

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

It’s been quite a week. Wednesday saw an appreciable fall in mortgage rates following the Federal Reserve’s forward guidance on future hikes in general interest rates. (That was in spite of that guidance not materially changing from the previous month).

Unfortunately for mortgage rates, Thursday brought good news for the economy, showing much stronger growth in gross domestic product than had been expected. And mortgage rates rose significantly.

Friday brought better news for those rates when an important inflation gauge showed price rises for consumers slowing more than expected.

Still, overall, the bad news outweighed the good. And mortgage rates nudged upward this week.

Next week

There are potential mortgage-rate-moving reports every day next week except Monday. However, most of them are unlikely to send those rates soaring or tumbling.

The jobs report

The big exception is July’s jobs report, formally called the employment situation report, which is due out next Friday. This is currently one of the Big 3 monthly economic reports because the jobs market is a key indicator of how the economy’s holding up.

As you know, mortgage rates tend to fall when the economy’s weak and rise when it’s strong. So, for those rates to move lower, we need the report to show fewer new jobs created (aka “nonfarm payrolls”), a rising unemployment rate, and falling hourly wages.

Unfortunately, it’s pretty unlikely we’ll see all of those. Indeed, economists polled by MarketWatch are forecasting that both hourly wages and the unemployment rate will hold steady.

They are, however, expecting a modest fall in the number of new jobs created that month. They reckon that’s likely to edge down to 200,000 in July from 209,000 in June.

But beware. Those economists have had a dismal forecasting record for this report. And in recent years they’ve almost always expected fewer new jobs than were actually created.

Other reports next week

The other reports that are likely to move mortgage rates appreciably next week are also employment-related.

Tuesday’s job openings and labor turnover survey (JOLTS) for June shows vacancies and the churn in jobs in detail. And that occasionally brings surprises.

And Wednesday’s ADP employment survey is sometimes seen as a bellwether for the official jobs report. However, this covers only the private sector. And any movement in mortgage rates it creates is likely to be swamped by Friday’s big event.

In addition to employment reports, there are some purchasing managers’ indexes (PMIs) next week from the Institute of Supply Management (ISM) and S&P. These rarely cause big waves for mortgage rates but they can exert some upward or downward pressure. The same goes for the U.S. productivity report for the second quarter of this year (Q2/23), which comes out next Thursday.

Economic reports next week

Here’s a list of those important economic reports scheduled for next week and a few lesser ones. If you’re unsure what any of the abbreviations mean, I covered those in the previous section.

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 JOLTS. Plus July PMIs for the manufacturing sector from S&P and the ISM
• Wednesday — July ADP employment report
• Thursday — U.S. productivity during Q2/23. And July PMIs for the services sector from S&P and the ISM. Plus new jobless claims for the week ending Jul. 29
• Friday — July jobs report, including nonfarm payrolls, the unemployment rate, and hourly wages

Friday’s jobs report is by far the most important economic release next week.

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

Mortgage interest rates forecast for next week

Nobody knows what next week’s economic reports will say. So, all I can do is guess what will happen to mortgage rates.

I have a gut feeling that the jobs report won’t be as rate-friendly as economists are expecting. And, purely on that basis, I predict that mortgage rates might rise moderately or modestly 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

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.