Mortgage rates today, Sep. 9, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell moderately yesterday. Unfortunately, over the whole of last week, they rose appreciably.

There’s even more uncertainty next week than there was this. So, I’m saying that mortgage rates are unpredictable over the next seven days.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

To me, it’s still looking unlikely that we’ll see a sustained downward trend in mortgage rates anytime soon. It will happen one day, but I doubt it will be this year.

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

Yesterday, I explained how the issuing of commercial bonds earlier in the week had contributed to mortgage rate rises. Those bonds, worth about $60 billion, were sold in a matter of days.

A few things determine mortgage rates but by far the most important is the yield on a type of bond called a mortgage-backed security (MBS). Many investors were tempted by the commercial bonds on offer and chose them instead of MBSs and U.S. Treasury securities.

That lower demand for MBSs drove their price lower. And lower bond prices invariably mean higher yields. Meanwhile, higher MBS yields almost always mean higher mortgage rates.

Yesterday’s New York Times (paywall) described the week’s commercial bond phenomenon as “a sign of rising confidence that companies are willing to borrow rather than conservatively manage their debt loads, and investors are willing to lend rather than sit on cash, as concerns about a potential recession diminish.”

It’s certainly true that fears of a recession are much less acute than they were only a few months ago. Investors still expect the economy to slow, which should be good for mortgage rates. But they’re no longer anticipating sustained negative growth.

We may see some tension between a slowing economy dragging mortgage rates lower and further issuances of commercial bonds that might push those rates higher. Unfortunately, we’ll have to wait to see how that plays out.

Next week

Last week, I was hoping that a lack of important economic reports might result in a quiet seven days for mortgage rates. But commercial bonds ruined that hope.

Next week has plenty of important economic reports, some of which have the potential to move mortgage rates sharply higher or lower. But we won’t know whether they will — or the direction those rates might take — until the data are released.

Generally, bad economic news is good for mortgage rates while good news is bad. With inflation, the lower the rate of price rises the better.

By far the most important report next week is the consumer price index (CPI) for August. And recent jumps in oil prices mean it’s likely to rise.

Analysts (specialist economists) are forecasting that the CPI will have increased to 0.6% that month compared to 0.2% in July. But investors will have already baked that prediction into mortgage rates.

So, only a larger-than-expected jump is likely to push mortgage rates higher. A smaller-than-expected one might see them fall.

Thursday’s producer price index (PPI) and Friday’s import price index (IPI) are nothing like as important as the CPI. But they are gauges of inflation earlier in the supply chain. So, they could move mortgage rates if they bring surprises.

Next week’s other blockbuster report is due on Thursday and covers retail sales in August. And analysts are expecting the growth of those to slow to 0.1% from 0.7% in July.

Again, investors will already have priced that forecast into mortgage rates. So, it’s the difference between the actual numbers and the forecasts that counts. Expect higher mortgage rates if sales were above the forecast and lower if they fell short.

Economic reports next week

Read the previous section for the economic reports and events most likely to move 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.

• Wednesday — August consumer price index
• Thursday — August retail sales. Plus the producer price index (PPI) for that month. And new jobless claims for the week ending Sep. 9
• Friday — August import price index (IPI). Plus that month’s industrial production and capacity utilization. And consumer sentiment index

Next week could be exciting.

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

Mortgage rates forecast for next week

How mortgage rates move next week could largely depend on the more important economic reports that are on the calendar. And I have no idea what those will say.

So, my only prediction can be that mortgage rates next week are unpredictable.

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.