Mortgage rates today, October 23 & interest rate forecast for next week

Today’s Mortgage and Refinancing Rate

Average mortgage rates rose again yesterday. These, of course, remain exceptionally low by almost all historical standards. But they’ve been going up for months now.

And I suspect that Mortgage rates could rise again next week. Because the forces that pushed them higher (see below) remain powerful. And the momentum still seems strong. However, periods of falls are inevitable, and I cannot rule out one in the next seven days.

Find and lock in a low rate (Oct 23, 2021)

Current Mortgage and Refinancing Rates

Find and lock in a low rate (Oct 23, 2021)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. Click here for the latest news about the consequences of the coronavirus for your home loan.

Should You Block a Mortgage Interest Today?

All mortgage interest rates have been rising for several weeks. And for the most common loan types, the turning point was August 4, with sharper increases since September 15.

Of course, the Freddie Mac Chart from which that information is drawn shows some declines since those data. But only short and superficial. And you have to go back to April 7 to see higher rates than the current ones.

So yes. If I were you, I’d lock my rate today. Because unfortunately there is little sign that the uptrend will end any time soon.

Read on to discover the drivers driving these rates up. And why they are unlikely to disappear anytime soon.

Anyway, my personal recommendations remain:

• KEY LOCK when you get closer 7 to dawn
• KEY LOCK when you get closer 15 to dawn
• KEY LOCK when you get closer 30 to dawn
• KEY LOCK when you get closer 45 to dawn
• KEY LOCK when you get closer 60 to dawn

But with so much uncertainty right now, your instincts could easily turn out to be just as good as mine — or better. So let yourself be guided by your feelings and your personal tolerance for risks.

What drives the current mortgage interest rate?

What are the forces currently driving up mortgage rates? They are the same as the three who have been doing this for several weeks. So if you are a regular reader and know it by heart, you can skip this section.

Still reading? Well, those powers are:

1. The Federal Reserve’s Impending Actions

Virtually everyone expects the Federal Reserve to announce on Nov. 3 that it will phase out its “quantitative easing” (cheap money) programs. If so, the process will begin in mid-November and aim to end the programs completely by mid-2022.

What does that have to do with mortgage interest? Under one of those programs, the Fed has spent $40 billion every month for the past 19 months on a type of bond: a mortgage-backed security (MBS). And those MBSs are the main determinant of mortgage rates.

In other words, since the pandemic really broke out, the Fed has kept mortgage rates artificially low. It is clear that when that stops, mortgage rates are likely to rise.

In fact, they are likely already a direct result of investors anticipating the Fed’s widely signaled intentions. So some of the gains over the past few weeks are likely due to investors positioning themselves for the announcement.

2. Inflation

Investors in bonds (including MBSs) are very sensitive to inflation. They buy a fixed income over a certain period of time. And if inflation – as it is now – exceeds the rate of return (“return”) they can get, then they will lose money.

So it’s not surprising that in times like these, they shy away from bonds. And that lowers the price and increases the yield on those bonds. When applied to MBSs, that drives up mortgage rates.

Many thought that the current inflation rate would now fall. But the latest consumer price index (CPI) showed prices were up 5.4% year over year. And there is little sign of that easing in the near term.

Inflation thus puts real upward pressure on mortgage rates.

3. Falling COVID-19 Infection Rates

The New York Times (paywall) is one of several papers keeping records of the pandemic. And on September 13, it reported the recent spike in daily reported new cases of COVID-19: 285,058.

But since then, new cases have been continuously reported. So yesterday, that number had dropped to 87,344.

Of course, the pandemic is the underlying cause of both the Fed’s quantitative easing program and higher inflation. But the fear of this among investors has also contributed to the fact that mortgage interest rates remained low. And as the threat subsides, so too will that put upward pressure on mortgage rates.

Nothing is impossible

Of course, it is always possible for something big to happen that is so terrible that it will flood the markets and cause mortgage rates to fall again. But it should be something important.

A new, highly virulent, vaccine-resistant strain of SARS-CoV-2 (the virus that causes COVID-19) could do this. As well as a serious shooting war between the US and China, perhaps over Taiwan. Or a 1929-style stock market collapse.

But, without an event of that magnitude, higher mortgage rates currently appear to be continuing.

Economic reports next week

Next Thursday’s first reading (of three increasingly accurate) of gross domestic product in the third quarter of 2021 will be closely monitored. And there’s a whole host of inflation, income, and spending data to be submitted the day after. Meanwhile, consumer confidence and sentiment measurements are scheduled for next Tuesday and Friday.

But none of the other economic reports listed below are likely to cause much movement in the markets unless it contains shockingly good or bad data:

• Tuesday — October Consumer Confidence Index and August S&P Case-Shiller Home Price Index. Plus the sale of new homes in September
• Wednesday — September Durable Goods Orders and Core Capital Goods Orders
• Thursday — Gross Domestic Product (GDP), Q3 2021 (prior estimate). Plus weekly new unemployment insurance claims until October 23
• Friday — September core inflation; nominal personal income; real disposable income; nominal consumer spending; real consumer spending. Plus the Consumer Confidence Index in October

Some reports next week could move the markets.

Find and lock in a low rate (Oct 23, 2021)

Mortgage interest forecast for next week

Unfortunately I suspect that Mortgage rates could rise again next week. But we’ll probably get a small drop as an adjustment soon. And it is always possible that this could happen in the next seven days. Keep in mind that, in my opinion, higher mortgage rates are more than likely in the coming weeks.

Mortgage and refinancing rates usually move together. And a gap that had grown between the two has been largely eliminated by the recent elimination of the unfavorable market refinancing fee.

And another recent regulatory change has likely made mortgages for investment properties and vacation homes more accessible and cheaper.

How is your mortgage interest determined

Mortgage and refinancing 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 is highly dependent on the economy. Mortgage rates are therefore usually high when things are going well and low when the economy is in trouble.

your part

But you play a big role in determining your own mortgage rate in five ways. And you can influence it significantly by:

1. Shop for Your Best Mortgage Rates – 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 deposit you can make – lenders like you have real skin in this game
4. Keep Your Other Loans Modest — The lower your other monthly obligations, the bigger the mortgage you can afford
5. Choosing Your Mortgage Carefully — Are You Better Off With A Conventional Loan, FHA, VA, USDA, Jumbo Or Another Loan?

If you spend time lining up these ducks, you can win lower prizes.

Remember it’s not just a mortgage rate

Be sure to factor in all of your future homeownership costs when working out how much of a mortgage you can afford. So focus on your “PITI”. that’s your pprincipal (pays back the loan amount), linterest (the price of borrowing), (property) taxes, and (homeowners) linsurance. Our mortgage calculator can help you with this.

Depending on your mortgage type and the amount of your down payment, you may also need to pay for mortgage insurance. And that quickly runs into three figures per month.

But there are other possible costs. So you have to pay VvE contribution if you choose to live somewhere with a VvE. And no matter where you live, you have to factor in repair and maintenance costs. There is no landlord to call if something goes wrong!

Finally, you will find it hard to forget the closing costs. You can see this reflected in the annual percentage rate (APR) that you will be quoted. Because that effectively spreads them over the term of your loan, making it higher than your normal mortgage interest rate.

But maybe you can get help with those closing costs and your deposit, especially if you are a first-time buyer. Read:

Deposit Programs in Every State for 2021

Mortgage Interest Methodology

The Mortgage Reports receives daily rates based on selected criteria from multiple lenders. We arrive at an average rate and APR for each loan type to display in our chart. Because we average a range of rates, you will get a better idea of ​​what to find in the market. In addition, we calculate average rates for the same types of loans. For example FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.