Mortgage rates today, August 27 and rate forecasts for next week

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Today’s Mortgage and Refinance Rates

Average mortgage rates fell yesterday for a second straight day. But the rises earlier in the week mean they were significantly higher last night than they were seven days earlier.

Once again, I am not in a position to predict the evolution of mortgage rates next week. The economic data tells conflicting stories and these rates are just too volatile.

Current mortgage and refinance rates

Program Mortgage rate APR* To change
30-year fixed conventional 5.852% 5.885% +0.01%
15-year fixed conventional 5.28% 5.338% +0.03%
20-year fixed conventional 5.921% 5.967% -0.04%
10-year fixed conventional 5.131% 5.217% -0.04%
30-year fixed FHA 5.537% 6.296% +0.03%
15-year fixed FHA 5.492% 5.986% +0.05%
30-year fixed PV 5.282% 5.502% -0.3%
15-year fixed VA 5.449% 5.812% +0.1%
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.


Should you lock in a mortgage rate today?

Don’t lock in on a day when mortgage rates look set to drop. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. Thus, they do not change daily to reflect fleeting sentiments in volatile markets.

In my view, mortgage rates are more likely to rise slightly than fall over the rest of the year. But some experts disagree with me.

Still, my personal rate lock recommendations remain:

  • TO BLOCK if closing seven days
  • TO BLOCK if closing 15 days
  • TO BLOCK if closing 30 days
  • TO BLOCK if closing 45 days
  • TO BLOCK 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 your own risk tolerance guide you.

What’s Moving Current Mortgage Rates

Yesterday, Federal Reserve Chairman Jerome Powell gave a singularly important speech, which made headlines around the world.

According The New York Times (paywall), Mr Powell “delivered a sobering message on Friday, saying the Fed needs to keep raising interest rates – and keep them high for a while – to get the worst inflation under control. fast for decades.

You can read a transcript of speech on the Fed’s website. But perhaps the most telling message from Mr. Powell was:

We are taking strong and quick action… We will continue until we are satisfied that the job is done.

He also acknowledged that the rate hikes would cause “some pain for households and businesses.” He continued: “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.

This means that the Fed will continue to raise general interest rates for months to come. And if his actions cause a recession, so be it.

The markets had no reason to expect a less forceful message. But that didn’t stop them from hoping for one. And stock markets plunged on the announcement of the speech: the S&P 500 index fell 3.4% and the Dow lost just over 1,000 points on the day.

Powell and mortgage rates

Yesterday, before his speech, I wrote: “…were [Jay Powell] take a hawkish turn, confirming that future rate hikes will remain aggressive, mortgage rates could rise today.

And yet, mortgage rates have come down moderately. So why was I wrong? There are two likely reasons.

First, the bond market that largely determines mortgage rates had spent seven of the previous eight business days rethinking what Mr. Powell might say. This is why these rates had been steadily increasing before Thursday.

So his tough stance, which had recently been flagged by other senior Fed officials, was less of a surprise than it would have been a few weeks ago. Investors may have decided they had already more than adequately assessed the risks of the speech.

And second, all of that cash that investors acquired during Friday’s stock market crash had to go somewhere. They had sold shares. What should they do with the profits? The answer for many may have been to buy mortgage bonds, which were meant to look like a safe haven. The extra demand would have pushed up prices, which would have lowered yields – and mortgage rates.

Personally, I find it hard to imagine mortgage rates falling significantly and sustainably as long as the Fed continues to push interest rates higher. However, several experts disagree with me, predicting lower mortgage rates in the next quarter (October to December). It’s up to you whether you believe them or me.

Economic reports next week

Next week’s bestselling economic report will be released on Friday. This is the August jobs report, often referred to as the “jobs report”.

Critical reports in the following schedule are shown in bold. Further reports coming out next week are unlikely to move markets or mortgage rates much unless they contain surprisingly good or bad data.

  • tuesday — august consumer confidence index. More July Shakes (Job Vacancies and Labor Turnover Survey) and S&P Case-Shiller U.S. House Price Index for June
  • Wednesday — August ADP private sector employment report. Sometimes seen as an indicator for Friday’s official report
  • Thursday — Second revision (of three) of productivity and unit labor costs estimates for the second quarter of 2022. Plus weekly new claims for unemployment insurance through August 27. Also August sales for light motor vehicles
  • Friday – August Jobs Reportincluding non-farm payroll, unemployment rate and average hourly wage

Watch out Friday!

Mortgage interest rate forecast for next week

Someday I’m going to start forecasting mortgage rates again for the following week. But that day has not yet arrived. Unfortunately, these rates remain essentially unpredictable over a seven-day period.

Flip a coin or read your horoscope. They’re about as reliable as it gets.

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 inflation rates can undermine these trends.

Your part

But you play an important role in determining your own mortgage rate in five ways. And you can affect it significantly by:

  1. Shop around for your best mortgage rate – They vary widely from lender to lender
  2. Boost your credit score – Even a small bump can make a big difference to your rate and payments
  3. Save the biggest down payment possible – Lenders like you to have real skin in this game
  4. Keep your other borrowings small — The lower your other monthly commitments, the higher the mortgage you can afford
  5. Choose your mortgage carefully – Are you better off with a conventional, conforming, 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) Iinsurance. Our mortgage loan calculator can help you.

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) that lenders will quote you. 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. Lily:

Down payment assistance programs in every state for 2021

Mortgage Rate Methodology

Mortgage reports receive daily rates based on selected criteria from multiple lending partners. 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 the rates for the same loan types. 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.

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