Mortgage Rates Today, August 21, & Rate Forecast For Next Week

142


Today’s Mortgage and Refinance Rates

Average mortgage rates remained stable yesterday. And the same goes for the week. They fell by an almost imperceptible amount in those five business days.

And we may well have more for the same. Since mortgage rates next week Looks likely to drift up and down without any clear direction. However, it’s possible that could change on Friday, which brings some important economic data and a key speech from the Federal Reserve chair.

Find and lock low rates (August 22, 2021)

Current mortgage and refinance rates

program mortgage rate April* Change
traditional 30 year fixed 2.771% 2.771% +0.02%
traditional 15 year fixed 1.992% 1.992% Stable
traditional 20 year fixed 2.49% 2.49% +0.12%
traditional 10 year fixed 1.851% 1.898% +0.01%
30 year fixed FHA 2.688% 3.343% Stable
15 Year Fixed FHA 2.387% 2.987% +0.01%
5/1 ARM FHA 2.5% 3.207% Stable
30 year fixed VA 2.255% 2.426% +0.01%
15 year fixed VA 2.25% 2.571% Stable
5/1 ARM VA 2.5% 2.386% Stable
Rates are provided by our partner network, and may not reflect the market. Your rate may be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock low rates (August 22, 2021)


COVID-19 Mortgage Update: Mortgage lender rates and rules are changing due to COVID-19. To see how coronavirus can affect your home loan, click here.

Should You Lock in a Mortgage Rate Today?

The risk of your rate continuing to rise seems a little less scary than it did last week. But they are still there.

Personally, I would lock my rate regardless of when I was due to close. But I am very cautious. And you may (or may not) make a profit while swimming, although they probably won’t be that big. Locking or floating right now has more to do with your appetite for risk than any trend or forecast, all of which are uncertain.

So, to accommodate everyone, my personal recommendations remain:

  • lock if closing 7 Day
  • lock if closing 15 Day
  • lock if closing 30 Day
  • swimming on water if closing 45 Day
  • swimming on water if closing 60 Day

However, with so much uncertainty at the moment, your instincts could easily be as good as mine – or better. So be guided by your gut and your personal tolerance for risk.

What’s going on with current mortgage rates

The current mortgage rates aren’t moving much. Because they’ve been pretty flat this week. Read on to find out why that might – but probably won’t – change next Friday.

Are rates likely to rise?

On Thursday, Fannie Mae and the Mortgage Bankers Association (MBA) both updated their rate forecasts for 30-year, fixed-rate mortgages (FRMs). And both rein in their more pessimistic predictions. See the difference in each team’s forecasts between this month and last in the following two tables. “Q” stands for quarter. So, for example, Q4 2021 is the last three months of this year.

Fanny had the sunniest outlook ever. And its economics team hopes:

Period August forecast July Forecast
current quarter 2.8% 3%
Q4 2021 2.9% 3.1%
Q1 2022 3% 3.2%
Q2 2022 3% 3.2%
Average 2021 2.9% 3%
Average 2022 3.1% 3.2%
Fannie Mae forecasts for a 30-year FRM – in July and August 2021

So, if Fannie turns out to be right, we are prepared to hold low mortgage rates for at least 16 months.

However, MBA forecasts are very different. And much less optimistic:

Period August forecast July Forecast
current quarter 2.9% 3.2%
Q4 2021 3.3% 3.4%
Q1 2022 3.5% 3.8%
Q2 2022 3.7% 4%
Average 2021 3.3% 3.4%
Average 2022 4.2% 4.3%
Forecast of MBA rates in July and August 2021 — for 30 year FRM

The MBA bravely forecasts an average for these rates during 2023. And it expects it to be 4.8%.

Shouldn’t you trust anyone?

These are two teams of highly trained economists whose members spend their professional lives studying mortgage rates and related fields. And they use sophisticated computer-based modeling to reach their conclusions.

Yet one would think that these special mortgage rates would average 3.1% next year and another 4.2%. They are not small differences.

And it gives me a unique opportunity to revisit my favorite quote of all time:

The only function of economic forecasting is to make astrology look respectable.

John Kenneth Galbraith, a late Harvard economist

And yet governments and hugely successful corporations around the world still use economic forecasts when making important decisions. Why? Because there is nothing else to go on. They know those forecasts can be wrong. But they like to decide things based on some information when the only option is none.

And this is the situation in which the rest of us find ourselves. We look at and weigh forecasts, as well as other information we have during our decision-making processes. We know they are imperfect. But there is nothing more to go on.

Who would be right?

The team at Fanny is highly experienced and reliable. But I fear that MBA may be more accurate.

Because Fannie thinks the Federal Reserve’s tapering, which is highly likely to happen this year — and possibly early September — won’t affect mortgage rates.

The Fed is currently buying heavily ($2.5 trillion– worth to dateof mortgage-backed securities, which are a type of bond that effectively (along with some other less significant influences) determines mortgage rates.

That’s why the Fed is currently keeping mortgage rates artificially low. And, when it slows down and then stops (“taperes”) those purchases, I think it’s beyond likely that mortgage rates will rise.

This time history may not repeat itself properly. But the last time the Fed eased a similar asset purchasing program was back in 2013, mortgage rates rose and remained high.

Fanny couldn’t miss it. And there should be good reasons to think that (and the current boom) will have little effect on mortgage rates. But I can’t imagine what they are.

economic report next week

Friday is likely to be the most important day for mortgage rates next week. And that’s mainly because Fed Chair Jerome Powell is due to speak that day (virtually) at 10 a.m. (ET) at the annual economic policy symposium for central bankers in Jackson Hole, Wyoming.

Now, there was a time when some thought he might have chosen that speech as the time to announce the start of the taping (see above). But now it seems less likely.

All he can do is signal that such an announcement is coming soon. And everything he says appears to make tapering more fixed or more imminent, raising mortgage rates. Of course, he can say nothing to upset the markets (he’s a master of that), which would leave those rates unaffected.

And, by the time he speaks, Mr. Powell will have seen next week’s key economic report, which is due to end earlier that morning. Inflation is one of the Fed’s two major obsessions. And that report includes July’s “core PCE,” the Fed’s preferred gauge of inflation, and personal consumption expenditure (PCE) prices excluding food and energy prices. We’ll also look at personal income and consumer spending figures for July, which are also significant numbers.

economic report calendar

None of the other economic reports listed below are likely to cause much movement in the markets, unless they include shocking good or bad data. Furthermore, regular readers will know that investors have been ignoring most of the economic reports in recent months. So the effects of the following may be different than usual:

  • Tuesday – July New Home Sales
  • Wednesday-July Durable Goods Orders
  • Weekly new claims for unemployment insurance Thursday – August 21. Also the updated estimates of Gross Domestic Product (GDP) during the second quarter of this year
  • Friday – July Personal Income, Consumer Spending and Core PCE. Plus the August Consumer Sentiment Index. And, perhaps most importantly, Fed Chair Powell’s speech.

Chances are, you can rest till Friday. But be sure to pay attention that morning.

Find and lock low rates (August 22, 2021)

Mortgage interest rates forecast for next week

So, as I just explained, next Friday could be a crucial day for mortgage rates. But that will largely depend on what Fed Chair Powell says in his speech that morning. before then, I’m hoping mortgage rates may slowly come down next week, going nowhere. However, there may be some business in the coming days in anticipation of that speech.

Mortgage and refinance rates usually move together. And the recent elimination of unfavorable market refinancing fees has largely bridged the gap between the two.

How is your mortgage interest rate determined?

Mortgage and refinance rates are typically determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And it is highly dependent on the economy. So mortgage rates are high when the economy is in crisis and low when things are good.

your part

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

  1. Shop around for your best mortgage rate – they vary widely from lender to lender
  2. Raise your credit score—even a small jump can make a big difference in your rate and payment
  3. Save as big a down payment as you can — lenders like you have to get the real skin in the game
  4. Keeping your other borrowings normal — the lower your other monthly commitments, the more mortgage you can afford
  5. Choosing Your Mortgage Carefully – Are You Better Off With a Traditional, FHA, VA, USDA, Jumbo or Another Loan?

The time it takes to get these ducks consistently can see you win at lower rates.

Remember, It’s Not Just a Mortgage Rate

When you’re deciding how big a mortgage you can afford, be sure to calculate all of your upcoming homeownership costs. So pay attention to your “PITI”. that’s yours Principal (pays off the amount you borrowed), Iinterest (cost of the loan), (property) Teaaxes, and (the owner of the house) IInsurance Our mortgage calculator can help with this.

Depending on the type of mortgage you have and the size of your down payment, you may also need to pay mortgage insurance. And he can easily walk into three digits every month.

But there are other potential costs. So if you choose to live with an HOA, you will need to pay homeowners association dues. And, wherever you live, you should expect repair and maintenance costs. There is no landlord to call when things go wrong!

Lastly, you’ll find it hard to forget the closing costs. That can appear in the annual percentage rate (APR) you’ll be quoted. Because it effectively spreads them over the term of your loan, making it 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 are a first time buyer. Reading:

Down Payment Assistance Program in Every State for 2021

mortgage rate method

Mortgage Reports fetches rates based on selected criteria from multiple lending partners each day. We arrive at the 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 can find on the market. In addition, we keep average rates for similar loan types. For example, the FHA fixed with the FHA fixed. The result is a nice snapshot of daily rates and how they change over time.



Source link