Mortgage and refinance rates today, July 9, and rate forecast for next week

Today’s mortgage and refinance rates

Average mortgage rates rose appreciably yesterday. This week’s sharp rises were smaller than last week’s sharp falls. But, overall, those two weeks almost exactly canceled each other out.

That seesawing has been a common feature of these rates for some weeks. And, if it continues, mortgage rates would fall over the next seven days. But, although I explain further down the page why this is happening, such unreliable patterns are a terrible way to make important decisions. So I’m continuing to make no formal weekly prediction.

Current mortgage and refinance rates

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Should you lock a mortgage rate today?

Don’t lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.

Mortgage rates continue on their metaphorical roller-coaster, soaring and plummeting for a white-knuckle ride. But, like with a real roller-coaster, they end up close to where they started.

Some think this is good. Because it suggests markets are establishing floors and ceilings that they won’t breach without a very good reason indeed. My only objection to that theory is that I doubt markets are collectively capable of such sophisticated thinking.

The result of all this is a great deal of sound and fury — and very little else. Most of the sharp movements cancel each other out. And that left mortgage rates a bit higher in June and again so far in July.

Loyal readers (Hello!) may remember I’ve been predicting for months just such a situation: mortgage rates continuing to rise but much more slowly than during the first five months of the year.

So, my personal rate lock recommendations remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• LOCK if closing in 30 days
• LOCK if closing in 45 days
• LOCK if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your personal tolerance for risk help guide you.

What’s moving current mortgage rates

Markets currently have two obsessions: inflation and a possible future recession. When they’re focused on the first, mortgage rates usually climb. When they switch their focus to recession fears, those rates typically fall.

Sometimes they switch focus on a whim or a rumor. But mostly they do so due to a new economic report.

Yesterday’s official employment situation report for June showed recruitment holding up much better than expected. And that makes the prospect of any recession far more distant. As Comerica Bank Chief Economist Bill Adams wrote in his weekly e-newsletter yesterday:

The jobs report demonstrates that the U.S. economy was not in a recession in the first half of the year.

So, that day, mortgage rates rose. And I shouldn’t be surprised if the data keep them high or push them higher for a while.

However, next week’s economic reports are largely about inflation. And Friday’s employment data could soon be forgotten if those reports show inflation cooling. I’m not expecting particularly good news on prices, so it will be a good surprise if that arrives and pushes mortgage rates lower.

Economic reports next week

Next Friday’s retail sales figures for June may reveal the extent to which the US economy is holding up under many global stresses — and therefore how likely a recession is. But most of next week’s crucial reports concern inflation and include the consumer price index (CPI) and the producer price index, which is an early indicator of where prices are heading.

As already discussed, inflation is one of markets’ two major obsessions at the moment. So we may well see volatility.

The potentially most important reports, below, are set in bold. The others are unlikely to move markets much unless they contain shockingly good or bad data.

• Monday — Three-year inflation expectations in June
• Tuesday — June small business index from the National Federation of Independent Businesses (NFIB)
• Wednesday — June consumer price index
• Thursday — June producer price index for final demand. Weekly new claims for unemployment insurance to Jul. 9
• Friday — June retail sales. Plus industrial production and capacity utilization for that month. Also July consumer sentiment index

It’s an unusually heavy week for these reports.

Mortgage interest rates forecast for next week

Once again, there’s no prediction for what might happen to mortgage rates next week. Sorry, but there’s simply too much volatility right now to make even a guess.

I believe that mortgage rates are more likely to gently rise than fall over the next several weeks. But the next seven days could go either way. And you should expect plenty of sharp up and down movements for some time to come.

Mortgage and refinance rates usually move in tandem. And the scrapping of the adverse market refinance fee last year has largely eliminated a gap that had grown between the two.

How your mortgage interest rate is determined

Mortgage and refinance 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’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.

Your part

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

1. Shopping around for your best mortgage rate — They vary widely from lender to lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
5. Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, they’re not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that 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’re a first-time buyer. Read:

Down payment assistance programs in every state for 2021

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an 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 might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.