Mortgage rates today, Sep. 23, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell moderately yesterday. But they rose appreciably over the entire week. Last Saturday, I warned that “the Fed could still push rates higher if it adopts a hawkish tone” on Wednesday. And that’s what happened.

Mortgage rates might fall next week. But that depends on a few things, most notably whether the possible government shutdown occurs next Friday and how hot that day’s inflation report is.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

I still doubt that we’ll see a sustained downward trend in mortgage rates this year. But that could change if the House shuts down the federal government next Friday and keeps it shut for a long time.

Still, for now, 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 rose this week largely because of the Federal Reserve’s events on Wednesday. The central message of the central bank was that general interest rates are likely to go higher and stay higher for longer than markets were hoping.

Next week

Government shutdown

The possibility of a government shutdown is scary for millions of people. But it’s looking increasingly likely as House Republicans struggle to find a formula for keeping it open that satisfies enough of the party’s representatives. The party’s slim majority makes this particularly difficult.

A failure to resolve the issue would trigger a shutdown on Sep. 30. But that effectively means next Friday evening.

If that does occur, what might it mean for mortgage rates? As I wrote yesterday, government shutdowns typically erode consumer confidence, slow growth, put the credit rating of the U.S. at risk, and send stock markets plummeting.

And all those would usually pull mortgage rates lower, especially if a lockdown were to be sustained.

But don’t bank on it yet. First, a shutdown may yet be averted. And, secondly, markets occasionally react perversely to big news.

Still, I shouldn’t be surprised if mortgage rates were to fall next week for as long as the lockdown threat continues. But they’ll probably quickly bounce higher if it’s averted.

Friday’s inflation report

The Fed’s favorite inflation report is the personal consumption expenditures (PCE) price index. And its August iteration is due to land next Friday morning.

That’s one of the Big 3 monthly economic reports. And it usually would have the potential to move mortgage rates sharply. However, it could be overshadowed by a government lockdown if that threat still exists when it’s published.

Analysts (specialist economists) are forecasting that the rise in core PCE prices (all prices less volatile food and energy ones) will have held steady in August at 0.2%. And that it will have dropped to 4% from 4.2% compared to a year earlier.

Anything lower than those forecasts would normally be good for mortgage rates and anything higher bad.

Other things next week

Next Thursday, we’re due the third and final reading of gross domestic product (GDP) growth during the second quarter of this year. And analysts are expecting it to have improved compared to the first reading: up to 2.3% annualized from 2.1%.

Again, anything higher than the analysts’ forecast could be bad for mortgage rates, and anything lower good.

Also next Thursday, Fed Chair Jerome Powell is scheduled to make a speech. That’s one of three speaking engagements on next week’s calendar for senior Fed officials. But Mr. Powell’s voice is by far the most influential over markets.

Often Mr. Powell’s words can move mortgage rates significantly. But he hosted a news conference only this Wednesday, so it would be a surprise if he had anything new to say.

Economic reports next week

The threat of a government shutdown is most likely to affect mortgage rates next week. But Friday’s inflation report and Thursday’s GDP figure could also influence them. Read the previous section for details.

In the following list of next week’s reports and events, 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 or news.

• Tuesday — August new home sales and July’s S&P Case-Shiller home price index. Plus September consumer confidence
• Wednesday — August durable goods orders
• Thursday — Q2 GDP revision. Plus Fed Chair Jerome Powell speech. And new jobless claims for the week ending Sep. 23
• Friday — Possible government shutdown. And August PCE price index. Plus September consumer sentiment

Friday’s the big day next week, especially if a government shutdown is still on the cards then. It also brings an important inflation report.

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

Mortgage rates forecast for next week

I’m hoping that mortgage rates might fall next week. But that’s mostly on the back of fear of a government shutdown. If that doesn’t happen and inflation turns out to be hotter than expected, those rates are more likely to rise.

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.