Mortgage rates today, June 26 and rate forecasts for next week
Today’s Mortgage and Refinance Rates
Average mortgage rates were unchanged yesterday. They are therefore just a little lower than a week ago. But much higher than two weeks ago.
I don’t expect mortgage rates to move much next week. Overall, it is likely that they will gently drift upward for some time to come. But there are bound to be good weeks during this period. Whether those rates are a little higher or lower next Saturday will only make a tiny difference to your monthly payments or your closing costs.
That said, the monthly employment situation report is due next Friday. And it’s more than capable of moving the markets and mortgage rates. So if this contains data that shocks investors, my prediction for next week could be overtaken by events.
Find and lock in a low rate (June 26, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||2.936%||2.936%||Unchanged|
|Conventional 15 years fixed||2,255%||2,255%||Unchanged|
|Conventional 20 years fixed||2.75%||2.75%||Unchanged|
|Conventional 10 years fixed||1.956%||2%||+ 0.02%|
|30-year fixed FHA||2.809%||3,466%||+ 0.03%|
|15 years fixed FHA||2.62%||3.222%||-0.04%|
|5 years ARM FHA||2.5%||3.22%||Unchanged|
|Fixed VA over 30 years||2,375%||2,547%||Unchanged|
|VA fixed 15 years||2.25%||2,571%||Unchanged|
|ARM VA 5 years||2.5%||2,399%||Unchanged|
|Prices are provided by our network of partners and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our pricing assumptions here.|
Find and lock in a low rate (June 26, 2021)
COVID-19 Mortgage Updates: Mortgage lenders change 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?
Yes, we have a better week for mortgage rates than we did seven days ago. But it wasn’t as good as I hoped it would be. There are often interesting drops after large increases. But this one barely registered.
Meanwhile, these rates remain exceptionally low by historical standards. But there is a near consensus among those who follow them more closely that they will drift higher in the months to come. And I think there could be a big increase later in the year – maybe as early as the end of July.
So my personal recommendations remain:
- LOCK if closing 7 days
- LOCK if closing 15 days
- LOCK if closing 30 days
- LOCK if closing 45 days
- LOCK if closing 60 days
However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, if not better. So let your instincts and your personal risk tolerance guide you.
What changes current mortgage rates
In yesterday’s daily article, I quoted a statement posted by Freddie mac Thursday. It said:
As the economy progresses and inflation remains high, we expect rates to continue to rise gradually in the second half of the year.
I have been saying something similar for a long time. Booming economies tend to result in higher mortgage rates. And the current boom appears to be the strongest since Ronald Reagan was in the Oval Office.
And others agree. Fannie Mae and the Mortgage Bankers Association (MBA) expect these rates to gradually increase as 2021 advances. They both believe they will average 3.0% in the current quarter, which is almost over. And Fannie believes they will end the year at 3.2%.
But the MBA estimates they will be up 3.5% in the last quarter – and 3.7% in the first three months of 2022.
The Fed (necessarily)
I guess the MBA is anticipating (and Fannie is ignoring) a possible Fed decision to slow its asset purchases, which currently include $ 40 billion a month in mortgage-backed securities. It is this buying frenzy that is currently keeping mortgage rates artificially low.
Pressure is mounting on the Fed to start cutting back on purchases soon. Yes, it is possible that he will announce his intention to do so at the end of July. But smart money seems to think that between the end of August and December, it’s more likely.
Of course, smart money is often wrong. But this time, I suspect it’s fair.
And when that Fed announcement takes place, mortgage rates will likely rise quickly. Because, the last time he said he would slowly reduce (“taper” in Fed parlance) asset purchases, in 2013 mortgage rates fell 3.35% on May 2 from the same year to 4.51% on July 11, according to the Freddie Mac Weekly. archives for 2013.
So, if the reactions in the markets are similar this time around, even the MBA might underestimate the change.
Nothing is inevitable
It all seems probable to me. But I have to admit that nothing is inevitable.
However, it would likely take a terrible disaster (natural or otherwise) that stifles economic recovery to prevent this scenario from happening.
Of course, the schedule of events is always unpredictable. But it would take something huge – and relatively unlikely – to stop it from happening.
Economic reports next week
Right now, the markets are obsessed with two economic indicators: inflation and jobs. This week, it’s employment in the spotlight. The official report on the employment situation, due on Friday, is arguably the most important monthly data on the calendar. And he’s still able to set off fireworks.
But the others listed below are unlikely to cause much movement in the markets unless they include some incredibly good or bad data. Plus, regular readers will know that the markets have ignored most economic reports in recent months. Thus, the effects of the following may be different from normal:
- Tuesday – April S&P CoreLogic Case-Shiller Home Price Index. More consumer confidence index for June
- Wednesday – June ADP Employment Report
- Thursday – June Manufacturing index from the Institute for Supply Management (ISM). And May construction expenses. No more new weekly unemployment insurance claims until June 26
- Friday – Official report on the employment situation in June, including non-farm payrolls, unemployment rate and average hourly earnings. Also May trade deficit plus factory orders
Once again, Friday is the time to watch.
Find and lock in a low rate (June 26, 2021)
Mortgage interest rate forecasts for next week
Assuming the employment situation report is not exceptional and nothing comes out of left field, we could be in a time of calm. And my best guess is that mortgage rates could remain stable or almost stable next week.
Mortgage and refinance rates generally move in tandem. But be aware that refinancing rates are currently a little higher than those for purchase mortgages. This spread is likely to remain fairly constant as they change.
Meanwhile, a recent regulatory change has made most mortgages for investment property and vacation homes more expensive.
How your mortgage interest rate is determined
Mortgage and refinancing rates are generally 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. Mortgage rates therefore 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. You can significantly affect it by:
- Find Your Best Mortgage Rate – They Vary Dramatically From Lender to Lender
- Increase Your Credit Score – Even a Small Bump Can Make a Big Difference in Your Rate and Payments
- Save the Biggest Down Payment Possible – Lenders love you to have real skin in this game
- Keep your other loans small – The lower your other monthly commitments, the larger the mortgage you can afford
- Choosing Your Mortgage Carefully – Are you better off with a conventional, FHA, VA, USDA, jumbo or whatever loan?
The time spent getting those ducks in a row can earn you lower rates.
Remember, it’s not just a mortgage rate
Be sure to count all of your upcoming homeownership costs when determining how much mortgage you can afford. So focus on your “PITI” This is your Pmain (reimburses the amount you borrowed), Iinterest (the loan price), (property) Taxes, and (owners) Iinsurance. Our mortgage calculator can help.
Depending on your mortgage type and the amount of your down payment, you may also need to pay for mortgage default insurance. And that can easily reach three digits each month.
But there are other potential costs. You will therefore 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 in case of a problem!
Finally, you will have a hard time forgetting the closing costs. You can see which are reflected in the Annual Percentage Rate (APR) that will be shown to you. Because it effectively spreads them out over the life 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 each 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 an APR for each type of loan to display in our graph. Because we average a range of rates, it gives you a better idea of what you might find in the market. In addition, we average the rates for the same types of loans. For example, fixed FHA with fixed FHA. The end result is a good overview of the daily rates and how they have changed over time.