Mortgage rates today, August 28 and rate forecasts for next week
Today’s Mortgage and Refinance Rates
Average mortgage rates fell slightly yesterday. But the week’s highs and lows canceled each other out. And the Friday night average rate was exactly the same as the previous Friday night, according to Mortgage News Daily figures.
And mortgage rates next week can also change very little. Yes, there will be the usual ups and downs. But rates may well be going nowhere. Of course, there is always the possibility that an unforeseen event will occur that disrupts this tranquility and shifts these rates decisively.
Find and lock in a low rate (February 9, 2022)
Current mortgage and refinance rates
|30-year fixed conventional||2.808%||2.808%||-0.01%|
|15-year fixed conventional||1.995%||1.996%||-0.12%|
|20-year fixed conventional||2.391%||2.391%||-0.1%|
|10-year fixed conventional||1.875%||1.922%||-0.04%|
|30-year fixed FHA||2.688%||3.343%||Unchanged|
|15-year fixed FHA||2.431%||3.032%||-0.01%|
|5/1 ARM FHA||2.5%||3.201%||Unchanged|
|30-year fixed PV||2.25%||2.421%||-0.07%|
|15-year fixed VA||2.25%||2.571%||Unchanged|
|5/1 ARM GO||2.5%||2.379%||Unchanged|
|Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.|
Find and lock in a low rate (February 9, 2022)
COVID-19 Mortgage Updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest information on the impact of the coronavirus on your home loan, Click here.
Should you lock in a mortgage rate today?
Barring anything unexpected, it seems likely that August will end with slightly higher mortgage rates than at the start. But the moves in recent weeks have been smooth and directionless. So you probably haven’t lost or gained much by floating your rate.
But the risks of continuing to do so remain real. Because almost all the experts predict more or less significant increases overall. The problem is that no one knows when.
So my personal recommendations remain:
- LOCK if closing seven days
- LOCK if closing 15 days
- LOCK if closing 30 days
- FLOAT if closing 45 days
- FLOAT if closing 60 days
However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, or even better. So let your instincts and personal risk tolerance guide you.
What’s Moving Current Mortgage Rates
Thus, mortgage rates remain calm. They continue to drift up and down but barely move when measured over weeks.
And, this week, they dodged a bullet when Federal Reserve Chairman Jerome Powell’s speech yesterday revealed nothing new. He confirmed that the Fed would start to slow down and later stop (“tapering”) its efforts to keep mortgage rates artificially low later this year. But everyone already knew that.
And regular readers will be relieved that I can finally stop complaining about the discount every day. However, the problem has not gone away and will return in a few weeks.
In the meantime, mortgage rates will be affected by economic news. But that, too, is a less direct relationship than it usually is.
Normally, mortgage rates rise on good economic news and fall on bad. But that’s not always the case right now.
Take the example of next Friday’s employment situation report. It is often the most influential of all the monthly economic reports, sometimes only rivaled by those on inflation. And a great report on Friday (many more jobs and higher average hourly earnings) would normally push mortgage rates up.
But that may not be the case this time. Because investors always have their eye on the Fed. And great jobs data could bring forward the dates when it stops keeping mortgage rates and Treasury yields low — and hasten when it starts raising its own interest rates.
Thus, some investors view good economic news as detrimental to their interests as it potentially hastens the end of the Fed’s easy money policies. And they are enjoying this particular holiday.
The Fed is unlikely to raise rates until well into 2022 or maybe sometime in 2023. And it’s important to differentiate between the Fed’s own interest rates and mortgage rates. A change in Fed rates tends to directly influence rates on variable rate loans, including credit cards, auto loans and the like. But mortgage rates are set differently and largely independently of the Fed (see below for details).
Economic reports next week
Please see the final paragraphs for more information on next week’s major economic report, Friday’s jobs report. It is difficult to overestimate the influence this can have.
None of the other economic reports listed below are likely to cause much movement in the markets unless they include surprisingly good or bad data. Additionally, regular readers will know that investors have ignored most economic reports in recent months. Thus, the effects of the following may be different from usual:
- Tuesday – August Consumer Confidence Index
- Wednesday – August ADP Employment Report (private sector jobs) and Institute for Supply Management (ISM) Manufacturing Index. Plus July construction spending
- Thursday – New weekly unemployment insurance claims through August 28. More factory orders in July
- Friday – August jobs report, including non-farm payrolls, unemployment rate and average hourly earnings. Plus the ISM services index, also for August
Again, Friday is the big day.
Show me today’s rates (February 9, 2022)
Mortgage interest rate forecast for next week
Now that the tapering is over (for a few weeks), I see no reason to expect any sharp changes in mortgage rates anytime soon. And I suspect that mortgage rates next week will be unchanged or barely changed.
Mortgage and refinance rates generally move in tandem. And a gap that had grown between the two was largely closed by the recent scrapping of the unfavorable market refinancing costs.
How your mortgage interest rate is determined
Mortgage and refinance rates are typically determined by prices in a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.
And it depends heavily on the economy. Thus, mortgage rates tend to be high when things are going well and low when the economy is struggling.
But you play an important role in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Find your best mortgage rate – They vary widely between lenders
- Boost your credit score – Even a small bump can make a big difference to your rate and payments
- Save the biggest down payment possible – Lenders like you have real skin in this game
- Keep your other borrowings small – The lower your other monthly commitments, the higher the mortgage you can afford
- Choosing Your Mortgage Carefully – Are You Better Off With a Conventional, FHA, VA, USDA, Jumbo, or Other Loan?
Time spent getting these ducks in a row can earn you lower rates.
Remember it’s not just a mortgage rate
Be sure to factor in all of your homeownership costs when calculating how much mortgage you can afford. So focus on your “PITI”. It’s your Pprincipal (repays the amount you borrowed), IInterest (the price of the loan), (the property) Jaxes, and (owners) Iassurance. Our mortgage calculator can help with these.
Depending on your type of mortgage and the amount of your down payment, you may also need to pay for mortgage insurance. And that can easily hit three figures every month.
But there are other potential costs. So you will have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repair and maintenance costs. There is no owner to call when things go wrong!
Finally, you will have a hard time forgetting closing costs. You can see those reflected in the Annual Percentage Rate (APR) you will be offered. Because it spreads them effectively over the term of your loan, making it higher than your normal mortgage rate.
But you may be able to get help with those closing costs. and your down payment, especially if you are a first-time buyer. Read:
Mortgage Rate Methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners every day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average a range of prices, it gives you a better idea of what you might find in the market. In addition, we average rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good overview of the daily rates and their development over time.
The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.