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Kacie Goff
Mortgage Expert
Kacie is a freelance contributor to Newsweek’s personal finance team. Over the last decade, she’s honed her expertise in the personal finance space writing for publications like CNET, Bankrate, MSN, The Simple Dollar, Yahoo, accountants, insurance agencies and real estate brokerages. She founded and runs her marketing content and copywriting agency, Jot Content, from her home in Ventura, California.
The Consumer Financial Protection Bureau issued consent orders against a pair of companies Tuesday, citing what it called harmful delays in their work servicing loans older adults use to withdraw equity from their homes.
The order seeks to permanently bar two Sutherland Global subsidies and Novad Management Consulting from reverse mortgage services and called upon them to pay millions of dollars in redress and a civil monetary penalty.
Sutherland was a subcontractor for Novad, and the two were responsible for servicing Home Equity Conversion Mortgages between 2014 and 2022. HECMs are Federal Housing Administration-insured products available to borrowers 62 and older.
“Sutherland and Novad were unprepared to support the hundreds of thousands of older homeowners whose reverse mortgages the defendants were responsible for,” CFPB Director Rohit Chopra alleged in a press release.
“The defendants ignored complaints and calls for help, and they let problems snowball into disasters,” he added. CFPB alleged around 150,000 distressed mortgage borrowers per year experienced financial harm as a result.
The companies “systematically failed to respond to thousands of homeowner requests for loan payoff statements, short sales, deeds-in-lieu of foreclosures, lien releases and requests for general information,” the bureau further alleged.
“The companies allowed problems to fester to critical points, which resulted in borrowers losing out on home sales, paying unnecessary costs, and fearing foreclosure,” the CFPB stated.
In doing this, the companies allegedly violated the Real Estate Settlement Procedures Act and also engaged in unfair, deceptive or abusive acts and practices, such as falsely telling borrowers they were in default or not offering options, according to the CPPB.
The bureau specifically named two units of Sutherland respectively handling government solutions and mortgage services in its complaint. They have been ordered to pay $11.5 million in redress to customers for their actions.
The CFPB also is ordering both those entities and Novad to collectively pay a roughly $5 million civil money penalty that will go into a relief fund for affected borrowers.
The bureau is asking for $1 million from Novad due to its declaration of an inability to pay.
At one point Novad was the official Department of Housing and Urban Development subservicer, but in 2022, Celink took over that role. Novad lodged a protest against the change at the time, but the Government Accountability Office dismissed it.
Sutherland said in a press release Tuesday that it had “reached a voluntary agreement” with the bureau regarding work as a subcontractor for Novad in its HUD work, performing “specified limited support services” for reverse and other mortgages.
The company said it “was not directly responsible for the reverse mortgage servicing conduct that is the subject of the CFPB agreement. HUD controlled all aspects of the reverse mortgage servicing and communicated only with Novad.”
“Sutherland had no direct access to HUD guidelines, the HUD servicing system, borrower communications, or the borrower files,” it added. “Sutherland therefore disagrees with the CFPB findings and denies the CFPB’s allegations.”
The company said it agreed to the order and to absorb the bulk of payments because it wanted to focus on current customers, not a past issue. Both a review of Novad financials and a key executive’s tax statement showed an inability to pay, it added.
Novad had not responded to inquiries from this publication at the time of this writing.
The CPFB has warned servicers that it won’t tolerate what it has called excessive or “junk” fees in many areas, including loss mitigation, stressing that customers have little choice in the matter of who tends to their mortgage after origination.
“Older homeowners did not choose Sutherland and Novad as their reverse mortgage servicer, and the CFPB is holding these defendants accountable for their unlawful neglect,” Chopra said.
Reverse mortgage servicing is a specialized process, and a relatively limited number of companies are active in the space.
Novad is a Landover, Maryland-based nonbank company and Sutherland Global is a digital services provider with headquarters in Pittsford, New York.
It’s nearly impossible to avoid hearing the phrase “data dependent” when following financial markets these days and this morning’s movement is the latest reminder. A mere miss of 0.1 vs 0.2 in Retail Sales has resulted in an immediate and obvious bond market reaction, even if it hasn’t been extreme in terms of the level of improvement.
It also clearly benefited from a larger downward revision to last month’s reading (-0.2 vs 0.0). The net effect is a move to the lowest yields of the week, but not as low as those seen last Friday.
With the 20yr bond auction this afternoon and a market closure tomorrow, it would be a surprise to see traders try to improve on these gains without a surprise of some sort in the news.
If you’re buying a home or plan to, there are a few good reasons you may want to lock in your mortgage rate this week.
Getty Images/iStockphoto
If you’re a potential homebuyer who’s wondering whether it really makes sense to buy a home in today’s tough (and expensive) housing market, you certainly aren’t the only one. For starters, home prices remain elevated due to a mix of limited inventory and persistent demand. And, ongoing inflation issues have led the Federal Reserve to keep its benchmark rate paused at a 23-year high. As a result, mortgage rates remain elevated, vastly increasing the cost of buying a home and giving many buyers pause.
But while buying a home can be a little more difficult (and substantially more expensive) in the current economic environment, it still makes sense to consider in many cases. After all, owning a home comes with a long list of benefits for homeowners, from the safety and security this type of investment provides to the potential to build equity in your property (which can be accessed at an affordable rate in the future).
If you’re going to purchase a home soon, though, you have a crucial decision to make: when to lock in your mortgage rate. And, with various economic factors at play, there are a few compelling reasons why this week might be an opportune time to make your move.
Learn more about your top mortgage loan options online now.
4 big reasons to lock in a mortgage rate this week
There are a few reasons you may want to consider locking in a mortgage rate this week, including:
Mortgage rates have dipped
The Federal Reserve decided to keep interest rates paused during its meeting earlier this week, and, as a result, mortgage rates have experienced a decline, with 30-year conventional loan rates dropping from an average of about 7.07% last week to today’s average rate of 7.00%. What that shows is this latest pause in rate hikes, coupled with other favorable economic data — like the latest inflation report showing a slight drop month-over-month — has created a more favorable environment for borrowers.
After all, lower mortgage rates translate to reduced monthly payments and the potential for significant savings over the life of your loan. And, all it takes is a fraction of a percent, like the rate drop we’ve seen over the last week, to make a big difference in terms of your loan costs. So, by locking in a mortgage rate now, you can capitalize on this dip and potentially secure a more affordable mortgage.
You may also want to consider that home prices may continue to stay elevated or even rise in many markets. If this home appreciation trend continues, delaying your purchase in hopes of lower rates could result in paying more for a home, potentially negating any benefits you gain from waiting for mortgage rates to drop further. But by moving forward with your home purchase now, you can potentially secure a property before prices climb.
Compare some of the best mortgage rates available to you here.
The uncertain economic environment poses risks
While mortgage rates have decreased recently, the economic landscape remains uncertain. Inflation, though it’s showing signs of easing, has proven stubborn over the past couple of years, and there’s no guarantee that this downward trend will continue. If inflation were to climb again unexpectedly, the Federal Reserve might respond with more aggressive rate hikes, leading to higher mortgage rates.
And, that’s not just a theoretical. The Fed has been clear about its goal of reducing inflation by keeping rates elevated, and it has already put off the expected mid-year rate hikes in lieu of more rate hike pauses. By locking in your rate now, though, you protect yourself against potential future increases and gain peace of mind in an unpredictable market.
Limited home inventory calls for quick action
The housing market also continues to face a shortage of available homes. This limited inventory has been a persistent issue since the start of the pandemic, driving up competition among buyers and putting upward pressure on home prices. And, while there’s hope that the inventory problems will improve in the coming months, many homeowners are holding onto their current record-low mortgage loan rates right now.
So, rather than selling and buying a new home with a much higher mortgage loan rate, many current homeowners are opting to stay put instead. That is making it even more challenging to find suitable properties in today’s market. By locking in the most favorable mortgage loan rate you can find right now, though, you position yourself to act quickly when you find a home that meets your needs, giving you an edge in a competitive market.
Increased lender competition can benefit buyers
Today’s elevated mortgage rates are slowing down the mortgage loan market, which means that lenders are vying for reduced business. This competition can lead to more favorable terms for borrowers, including lower rates and reduced fees. By engaging with lenders and locking in a rate now, you can take full advantage of this competitive environment, potentially securing terms that might not be available if market conditions shift.
Some lenders are also offering loan products that are designed to make homeownership more accessible, such as low down payment options, first-time homebuyer programs and loans with flexible credit requirements. But, these products may become less available or less favorable if economic conditions change. Making your move now allows you to consider these or other specialized offerings as part of the mortgage loan process while they’re still readily available.
The bottom line
While the decision to lock in a mortgage rate is ultimately based on your circumstances and goals, the current market conditions present a compelling case for action. Mortgage rates are down compared to last week, and increased lender competition could mean that there are more (or better) mortgage loan options to consider. And, by locking in a rate now, you could not only secure a more favorable mortgage rate but could also position yourself to act decisively in a competitive housing market.
Angelica Leicht
Angelica Leicht is senior editor for Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.
Congress must act in order to ensure the secondary mortgage market is safe, sound, and equitable, the government-sponsored enterprises regulator said in its annual report to Congress.
Apart from imposing capital requirements on Fannie Mae and Freddie Mac, the Federal Housing Finance Agency does not possess such authority, it noted in the report that primarily addresses activities it undertook in 2023 to, among other things, improve the GSEs’ financial health.
The FHFA highlighted specific issues that only Congress has the power to alter, including “changes to the Enterprises’ charter acts, adjustments to their statutory business model, the nature of any government guarantee and the creation of reserves funded by Enterprise guarantee fees to be accessed in the case of losses” and other structural reforms.
A split Congress deciding on what post-conservatorship looks like for the GSEs – a difficult, long-standing issue that has bedeviled administrations of both parties – is highly unlikely during what is already a highly contested election cycle.
The report also comes out as both companies are undergoing a shake-up at the top.
Priscilla Almodovar, Fannie Mae’s CEO, recently added the president’s title following the retirement of David Benson.
At Freddie Mac, president Michael Hutchins has been acting CEO since Michael DeVito’s retirement. There’s now a second c-suite vacancy, as Christian Lown, chief financial officer, is leaving the company effective June 28. Searches to fill both roles are underway.
Congress and the FHFA are not the only organizations involved in coming up with plans to end the Fannie Mae and Freddie Mac conservatorships, which have spanned 15 years.
“The U.S. Department of the Treasury, which holds a significant economic interest in the Enterprises, and other Federal agencies will need to resolve a series of outstanding issues as part of the process to end the conservatorships,” the report noted.
In particular, the Treasury has a liquidation preference on the senior preferred stock it holds in both companies. The changes to the preferred stock purchase agreements that ended the net worth sweep means that every quarter the GSEs have reported a profit, the liquidation preference has been growing.
At the end of the second quarter on June 30, the liquidation preference Treasury has for Fannie Mae holdings will be $203.5 billion and for Freddie Mac, $123.1 billion, according to calculations made by Bose George, an analyst at Keefe, Bruyette & Woods, in a May 5 report.
In the first quarter, Fannie Mae had net income of $4.3 billion, while Freddie Mae earned $2.8 billion.
The FHFA is also asking Congress to pass legislation to change the capital rules governing the GSEs. The Enterprise Regulatory Capital Framework mitigates the risks created by existing statutory definitions by putting in place supplemental minimum capital requirements but it adds more complexity to an already complicated scheme, the report said.
“If Congress were to give FHFA the same flexibility as the federal banking regulators by amending or removing the statutory capital definitions, FHFA could streamline the capital regulation,” the report said.
George made a series of calculations, based on each company’s normalized earnings and including the senior preferred stock, to determine how long it would take each to raise the additional capital needed as set by the ERCF.
Fannie Mae would need to come up with an additional $117.2 billion, and at normalized annual earnings of $14.5 billion, it would take about 8.1 years to recapitalize.
Freddie Mac would need slightly less time, 7.4 years, based on the need for $92 billion in more capital and a normalized annual earnings rate of $12.5 billion.
However, the FHFA calculations, which do not take into account the senior preferred stock, put the year-end combined shortfall at $404 billion, which exceeds adjusted total risk-based capital requirements and buffers as a result of both companies’ accumulated deficits.
“In the meantime, the Agency will focus on building the Enterprises’ capital reserves, improving their safety and soundness, and ensuring that they continue to meet their mission obligations,” the report said.
Besides the GSEs, the FHFA also regulates the Federal Home Loan Bank system. In 2023, the FHLBanks came under stress as a result of the failures of Silicon Valley Bank, Signature Bank and First Republic Bank, and the voluntary dissolution of Silvergate Bank.
“The FHLBanks maintained strong liquidity and lending capacity through the sector disruption and did not incur an advance credit loss,” the report said. “However, these bank failures and the ongoing market stress highlighted the need for a clearer distinction between the appropriate role of the FHLBanks, which provide funding to support their members’ liquidity needs across the economic cycle, and that of the Federal Reserve, which maintains the primary financing facility for troubled institutions with immediate, emergency liquidity needs.”
The FHFA report to Congress highlighted another report it did in November 2023, FHLBank System at 100: Focusing on the Future. Besides clarifying the FHLBanks’ mission, the FHFA’s legislative priorities include aligning eligibility requirements for different types of bank members, and streamlining requirements related to the Affordable Housing Program.
The notion of MBS underperforming Treasuries is front and center today–not because that underperformance is especially large, but mainly because MBS were often in the red while Treasuries were in the green. We have nothing new to add to yesterday’s similar discussion of MBS underperformance but have nonetheless attempted to add a few thoughts in today’s video. As for nuts and bolts, it was a boring day for bonds with modest gains for the long end of the yield curve (one major reason for MBS underperformance) and an uneventful, sideways grind in the afternoon.
Import Prices
-0.6 vs 0.0 f’cast, 0.6 prev
Export Prices
-0.4 vs 0.1 f’cast, 0.9 prev
Consumer Sentiment
65.6 vs 72.0 f’cast 69.1 prev
1yr inflation exp. unchanged
5yr inflation exp. +0.1%
08:58 AM
stronger overnight, but giving up some gains in the past half hour. MBS up 1 tick (.03) and 10yr down 2.7bps at 4.218
11:54 AM
Choppy trading in a narrow range. MBS underperforming with 5.5s down 1 tick (.03). 10yr yields are down 3bps at 4.215
03:14 PM
Zero change from the last update and very little volatility between now and then.
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Mortgage rates are down thanks to cooling inflation data and expectations that the Federal Reserve should still cut rates at least once this year.
Average 30-year mortgage rates fell to 6.95% this week, according to Freddie Mac. This is down four basis points from last week’s average. If inflation continues to show signs of slowing in the coming months, we could see rates continue to trend down.
“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.”
On Wednesday, the Fed announced that it will keep the federal funds rate steady for now, and new projections from policymakers suggest we’ll only get one rate cut this year. But in his press conference following the Fed’s June meeting, Fed Chair Jerome Powell hinted that their forecast could change if the data continues to show that the economy is cooling off.
Investors are still betting that the Fed will lower rates at least twice by the end of 2024, according to the CME FedWatch Tool, with the first cut likely to come in September. This would remove some of the upward pressure off of mortgage rates and allow them to trend down.
Mortgage Rates Today
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Mortgage Refinance Rates Today
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Mortgage Calculator
Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.
Mortgage Calculator
$1,161 Your estimated monthly payment
Total paid$418,177
Principal paid$275,520
Interest paid$42,657
Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months
By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
30-Year Fixed Mortgage Rates
This week’s average 30-year fixed mortgage rate was 6.95%, according to Freddie Mac. This is a four-basis-point decrease from the previous week.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates.
15-Year Fixed Mortgage Rates
Average 15-year mortgage rates inched up to 6.17% last week, according to Freddie Mac data. This is a 12-basis-point decrease from the week before.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.
How Do Fed Rate Hikes Affect Mortgages?
The Federal Reserve increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has slowed significantly, but it’s still a bit above the Fed’s 2% target rate.
Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.
The Fed has indicated that it’s likely done hiking rates and that it could start cutting this year. This would allow mortgage rates to trend down later this year.
When Will Mortgage Rates Go Down?
Mortgage rates increased dramatically over the last two years, but they’re expected to go down at some point this year.
In May 2024, the Consumer Price Index rose 3.3% year-over-year. Inflation has slowed significantly since it peaked last year, but it has to slow further before rates can continue trending down.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
Would Donald Trump’s return to the White House be good for the mortgage industry? Experts aren’t so sure.
The majority of mortgage professionals voted Republican in 2020 and say they’ll do the same this November, according to a recent Arizent survey. Many housing finance players still support President Biden, but the business is about the most Republican-leaning group among their financial services peers also surveyed.
No matter who’s in the Oval Office over the following four years, stakeholders suggest neither leader will directly help lenders and origination activity.
“We’re not assuming the election changes anything significantly for the mortgage industry,” said Bose George, managing director at Keefe, Bruyette and Woods.
Lenders are most worried about interest rates, a number the president, despite any past criticisms, has no control over. Experts who spoke to National Mortgage News about a possible Trump second term pointed to the small impacts his potential second term could deliver.
The bond market has a lot on its mind after this past week of economic data and events. Inflation quickly and increasingly looks like it may (finally) be turning the long-hoped-for corner. Timely employment metrics raise questions about labor market softening and Fed speakers are so eager to avoid jumping the gun on rate cuts after the Q1 inflation surprise that traders may wonder if they’ve moved from one side of the center to the other.
Nothing about today will change or inform any of that, it seems. We might have hoped that Import Prices would add to the disinflationary vibes, but alas, bonds actually lost ground after that (though not necessarily because of it. After Consumer Sentiment data also failed to inspire, it’s clear that bonds are checked out for the week and the trades coming in are occurring for reasons that are unrelated to today’s events.
Average mortgage rates edged a little higher last Friday. But that didn’t spoil a good week during which those rates tumbled overall.
Earlier this morning, markets were signaling that mortgage rates today might increase. But these early mini-trends often alter speed or switch direction as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 15-year fixed
6.445%
6.524%
+0.01
30-year fixed VA
6.962%
7.008%
+0.28
Conventional 30-year fixed
7.007%
7.057%
+0.01
Conventional 20-year fixed
6.774%
6.829%
+0.08
Conventional 10-year fixed
6.377%
6.455%
+0.03
5/1 ARM Conventional
6.612%
7.913%
-0.03
30-year fixed FHA
6.907%
6.953%
+0.2
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
Don’t be fooled by recent falls in mortgage rates. It may feel as if those rates have been falling more than rising, not least because they have since mid-April. But there was a sharp rise immediately before the subsequent fall. And, if you go back three months, mortgage rates were lower then than they are now.
Looking across the longer term, mortgage rates remain on an upward trajectory. But, this year, they’ve effectively been moving sideways so perhaps the upward trend is moderating or plateauing.
What we’re not seeing yet are sustained falls. And I judge the chances of falls and rises at roughly 50-50. Would you want to bet on those odds? I wouldn’t.
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
LOCKif closing in 60days
Of course, don’t lock your rate when mortgage rates look likely to fall. My recommendations are based on longer trends. And, within those, there will be rate-friendly days and longer periods that you can take advantage of.
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 own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes climbed to 4.29% from 4.22%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were falling this morning. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices ticked down to $79.05 from $79.07 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices decreased to $2,337 from $2,346 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — inched down to 38 from 40 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to rise. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
This week
Seven senior Federal Reserve officials have speaking engagements today and tomorrow. And they may try to correct any misapprehensions markets still have following last Wednesday’s Fed events.
The Fed made it pretty clear then that it expected to make only one cut to general interest rates during 2024. But markets are already second-guessing that, with the CME Group finding investors reckon there’s a 70% chance of two such cuts.
That explains markets’ muted reaction to last week’s pronouncements by the Fed. They simply didn’t believe the central bank’s message.
Investors have a pretty patchy record for second-guessing the Fed. But they’re sometimes correct. If they’re right this time, that could be good for mortgage rates. But, if the Fed sticks to its guns, that could be bad for them.
Today
This morning’s lone economic report is the June Empire State manufacturing survey. I don’t remember the last time that affected mortgage rates so we shouldn’t lose any sleep over it.
There is some economic news around that could influence markets. China’s growth is slowing and its property market is in trouble. And the French snap parliamentary election is freaking out some investors as the possibility of a hard-right party taking power is regarded as economically undesirable.
But the Chinese and French news would normally be helpful to mortgage rates. So, why were those rates rising overnight?
Well, it may be that investors are jittery over tomorrow’s economic data.
Tomorrow
Tomorrow morning, we’re due May data on:
Retail sales — Markets expect sales to edge up by 0.2% from April’s 0.0%
Industrial production and capacity utilization — Markets expect industrial production also to nudge up to 0.4% from April’s 0.0%. And capacity utilization, too, is expected to improve: to 78.6% from 78.4%
So, markets are expecting those numbers to show improvements, which would normally be bad for mortgage rates. But, luckily, those expectations are already baked into mortgage rates. And it’s the gap between those and tomorrow’s actual numbers that could create volatility.
For the best chance of mortgage rates falling, we’d like to see smaller numbers than markets are expecting. Bigger ones could push those rates upward.
The rest of the week
Bond markets are closed on Wednesday for the Juneteenth holiday. So, mortgage rates shouldn’t move that day, and my daily report won’t appear.
I’ll brief you on Thursday and Friday’s economic reports that might move mortgage rates on the day before each appears. But most on the calendar rarely affect those rates.
If you’re hungry for more information about what’s moving mortgage rates, do click through to the latest weekend edition of this daily report. It provides a deeper analysis together with a preview of what to expect in the coming week. It’s published each Saturday morning soon after 10 a.m. Eastern.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Jun. 13 report put that same weekly average at 6.95%, down from the previous week’s 6.99%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures. Still, they’re a good way to track trends.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the last three quarters of 2024 and the first quarter of 2025 (Q2/24, Q3/24 Q4/24 and Q1/25).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on May 22 and the MBA’s on May 17.
Forecaster
Q2/24
Q3/24
Q4/24
Q1/25
Fannie Mae
7.1%
7.1%
7.0%
6.9%
MBA
6.9%
6.7%
6.5%
6.4%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
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You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
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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 end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
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Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
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How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
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Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
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Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.