Mortgage rates today, January 16 and rate predictions for next week

Today’s Mortgage and Refinance Rates

Average mortgage rates fell slightly yesterday. But that followed six days with no falls, five of which showed rises. And the averages remain noticeably higher than they were at the start of the new year, when they were at or near their all-time low. Yet they remain incredible bargains in every way.

Unfortunately, there are still no reliable trends in these rates. But there are enough danger signals for me to suggest caution.

So I’ll lock in my rate ASAP, certainly if I were to close in the next 30 days. Read on for more details.

Find and lock in a low rate (January 22, 2022)

Find and lock in a low rate (January 22, 2022)

COVID-19 Mortgage Updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest information on the impact of coronavirus on your home loan, click here.

Should you lock in a mortgage rate today?

Probably. But that’s what I said last week. And mortgage rates have come down – but only a little – since then.

Personally, with rates in their current state of fluctuation, my instinct is to be cautious. that’s why I will lock as soon as possible.

But it is perfectly possible that these rates will fall further, perhaps even setting a new all-time low. And, if you’re feeling brave, no one could blame you for playing wait-and-see. Just be aware of the stakes you are playing with.

But, whatever your desire, read the following section before making your choice. At least you will make your decision based on some information. And, in the meantime, my personal recommendations are:

• LOCK if closing seven days
• LOCK if closing 15 days
• LOCK if closing 30 days
• FLOAT if closing 45 days
• FLOAT if closing 60 days

However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, or even better. So let your instincts and personal risk tolerance guide you.

What’s Moving Current Mortgage Rates

I’ve written extensively over the past week about the two contradictory forces currently affecting mortgage rates. On the one hand, the economic damage caused by the pandemic, which tries to lower rates. On the other hand, the prospect of much higher government spending and borrowing, pushing them higher.

Government borrowing

On Tuesday, the US Treasury auctioned 10-year bonds worth $38 billion. And there was a surprisingly strong demand for these. Indeed, it was this auction that stemmed the rise in bond yields and mortgage rates (these rates generally follow these yields).

But the outcome of one auction is a poor predictor of the next. And you would be recklessly brave to assume that this is the end of the upward pressure.

On Thursday, President-elect Joe Biden unveiled a $1.9 trillion pandemic stimulus (or relief) plan. However, his party lacks the 60 Senate seats needed to pass the enabling legislation.

But many expect more than $1 trillion in new borrowing. And it is likely that others will follow to fund infrastructure and other spending plans.

It is therefore very likely that the strong demand for government bonds will ultimately lead to a rise in Treasury bond yields. And that should drive up mortgage rates.

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Meanwhile, the pandemic continues to rage at alarming levels. According to the New York Times, “At least 3,744 new coronavirus deaths and 240,925 new cases were reported in the United States on January 15.”

Naturally, this has a severe economic impact. Quietly, Comerica Bank Chief Economist Robert A. Dye, Ph.D. offered yesterday:

US economic data in December and early January remained consistent with much weaker growth in overall economic activity compared to the historic rebound in GDP in the third quarter.

Bulletin Comerica Economic Weekly, January 15, 2021

But this “calmer growth” could turn out to be negative growth this quarter, and there is a real possibility of a double-dip recession. Retail sales figures yesterday showed declines for the third month in a row. And the most recent monthly and weekly employment data are dire.

Yes, the vaccination campaign will help. But it starts slowly. And we’re probably looking at several months before there’s any prospect of a return to near-normal economic activity. All the while, it will be a drag, keeping mortgage rates lower than otherwise.

So will government borrowing drive up mortgage rates? Or will the economic effects of the pandemic drag them down? This is what no one knows at the moment.

Economic reports next week

Next Monday is Martin Luther King Jr. Day. And the markets will be closed, so we won’t be posting our daily mortgage rate update. But we will be back on Tuesday.

Next week will be relatively quiet for economic reports:

• Thursday — New weekly unemployment insurance claims. And December housing starts and housing permits
• Friday-December Existing Home Sales

It would be surprising if any of them (with the possible exception of unemployment figures) had much effect on the markets.

Find and lock in a low rate (January 22, 2022)

Mortgage interest rate forecast for next week

Nothing has changed. And Mortgage rate movements remain inherently unpredictable. They could really go either way, but probably not very far.

Mortgage and refinance rates generally move in tandem. But note that refinance rates are currently a little higher than those for purchase mortgages. This gap is likely to remain constant as they change.

How your mortgage interest rate is determined

Mortgage and refinance rates are typically 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. Thus, mortgage rates tend to be high when things are going well and low when the economy is struggling.

Your part

But you play an important role in determining your own mortgage rate in five ways. You can affect it significantly by:

1. Shop around for your best mortgage rate – 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 down payment possible – Lenders like you to have real skin in this game
4. Keep your other borrowings small — The lower your other monthly commitments, the higher the mortgage you can afford
5. Choose your mortgage carefully – Are you better off with a conventional, FHA, VA, USDA, jumbo or other loan?

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

Remember it’s not just a mortgage rate

Be sure to factor in all of your homeownership costs when calculating how much mortgage you can afford. So focus on your “PITI” It’s your Pprincipal (repays the amount you borrowed), IInterest (the price of the loan), (the property) Jaxes, and (owners) Iassurance. Our mortgage loan calculator can help you.

Depending on your type of mortgage and the amount of your down payment, you may also need to pay for mortgage insurance. And that can easily hit three figures every month.

But there are other potential costs. So you will 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 when things go wrong!

Finally, you will have a hard time forgetting closing costs. You can see those reflected in the Annual Percentage Rate (APR) you will be offered. Because it spreads them effectively over the term 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. Read:

Down Payment Assistance Programs in Every State for 2020

Mortgage Rate Methodology

Mortgage reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and APR for each loan type to display in our chart. Because we average a range of prices, it gives you a better idea of ​​what you might find in the market. In addition, we average rates for the same types of loans. For example, fixed FHA with fixed FHA. The end result is a good overview of daily rates and how they change over time.