Mortgage rates today, May 4, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell moderately yesterday. The last seven days have been good. And those rates are appreciably lower than they were this time last week

There’s very little on the calendar over the next seven days that’s likely to alter the benign mood in markets. So, barring unscheduled events that affect markets, I’m optimistic that mortgage rates next week might continue to move gently lower.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Mortgage rates fell last week for two main reasons. First, the Federal Reserve was less pessimistic about future general interest rates than many had feared. And, secondly, yesterday’s jobs report suggested a weakening in the labor market.

Neither of these is certain enough to trigger a sustained downward trend in mortgage rates. The Fed’s rates policies remain at the mercy of economic data. And a single month’s jobs numbers aren’t enough to be sure of much.

So, I still reckon we’re unlikely to see consistently falling mortgage rates before, perhaps, the late summer or fall.

And, 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

Next week’s economic reports

Well, this is going to be brief. We rarely see such a light economic calendar as we’re due next week.

There are no tier 1 reports. That’s the sort that can move mortgage rates far and influence them for days or weeks.

True, there’s a Tier 2 one. Those sometimes affect mortgage rates but typically only briefly and in a limited way. Next week’s one covers consumer confidence in May

But the others are Tier 3: They rarely have an appreciable impact on those rates.

It’s worth mentioning that senior Fed officials share nine speaking engagements next week. Sometimes, these can affect mortgage rates. But the Fed laid out its current thinking about rates policy on Wednesday. And I wonder whether anyone will break from that day’s message so soon after it was delivered.

Summary of economic reports and events next week

See above for details about the more important economic reports next week.

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

• Monday — Nothing
• Tuesday — March consumer credit
• Wednesday — March wholesale inventories
• Thursday — Initial jobless claims during the week ending May 4.
• Friday — May consumer sentiment. And April federal budget

Barring relevant, unscheduled events, next week may be a snoozefest for mortgage rates.

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

Mortgage rates forecast for next week

With so little on the calendar that’s likely to affect mortgage rates, I’m hoping that next week might see those rates fall a little. My thinking is that they’re starting next week with markets in a benign mood and there’s no obvious reason that will change.

But, of course, there’s always a chance that some unscheduled event (perhaps a geopolitical crisis) sours the mood. So, as ever, nothing’s certain.

How your mortgage interest rate is determined

A bond market generally determines mortgage and refinance rates. It’s the one where trading in mortgage-backed securities takes place.

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 something called you “PITI.” That stands for:

• Principal — Pays down the amount you borrowed
• Interest — The price of borrowing
• Taxes — Specifically property taxes
• Insurance — Specifically 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.

==y