Mortgage rates today, May 21, and rate forecast for next week

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Today’s mortgage and refinancing rates

Average mortgage rates rose yesterday. And they hardly moved during the week; they just ticked. Yes, all those screaming headlines about market crashes and looming disasters have barely touched these prices for the last seven days.

Yesterday the stock markets started an upward movement. Then, around noon, they crashed. In the late afternoon they finally started to climb again. When there is so much volatility in a single day, it is foolish to predict market trends over a week. So, I’ll get by and admit that I have no idea where mortgage rates are going to be in seven days.

Current mortgage and refinancing rates

program mortgage rates Effective interest rate* To change
Conventional 30 years fixed 5,425% 5.45% -0.06%
Conventional 15 year fixed 4,577% 4.61% -0.05%
Conventional 20 years fixed 5.227% 5.264% -0.13%
Conventional 10 year fixed 4,608% 4,677% +0.02%
30 year solid FHA 5,491% 6.229% -0.06%
15 year solid FHA 4,743% 5.195% -0.11%
30 years solid VA 4,872% 5,084% -0.11%
15 years solid VA 4,834% 5.179% -0.47%
Prices are provided by our partner network and may not reflect the market. Your tariff may vary. Click here for an individual price offer. See our rate assumptions here.


Should You Lock A Mortgage Rate Today?

Don’t start on a day when mortgage rates seem to be falling. My recommendations (below) are intended to make longer-term suggestions for the general direction of these interest rates. So they don’t change daily to reflect fleeting sentiments in volatile markets.

With markets this uncertain, only you can decide when to lock in your mortgage rate. I shouldn’t be a bit surprised if they move higher or lower over the next week. So I’m in no position to lead you.

If I were you, I would lock my plan soon. But that’s because I’m careful. If you are braver, no one could accuse you of waiting in hopes of more falls.

Still, my personal rate-locking recommendations remain:

  • LOCK when it closes 7 days
  • LOCK when it closes 15 days
  • LOCK when it closes 30 days
  • LOCK when it closes 45 days
  • LOCK when it closes 60 days

However, with so much uncertainty right now, your instincts could easily turn out to be just as good as mine – or better. So let your gut feeling and your personal willingness to take risks guide you.

What moves current mortgage rates

It’s been a long time since we’ve seen such turbulence in the markets. Literally. Yesterday, The Wall Street Journal (Paywall) reported, “The Dow Industrials posted their eighth consecutive weekly loss, their longest such streak since 1932, just before the height of the Great Depression.”

One reason stock markets are doing poorly is excessive talk that borders on apocalyptic. Comparisons to the Great Depression may be technically correct, but there is little about the current economy that resembles then. Today we have low unemployment and decent growth.

And it’s the same when you keep talking about “stagflation”, i.e. stagnating growth in gross domestic product (and high unemployment) with very high inflation rates at the same time. In an e-newsletter for the New York Times yesterday, economist Paul Krugman explained that any stagflation that is about to occur (and certainly isn’t there yet) will much more resemble the 2007-08 episode than the early 1980s.

We’re not going back to the 80’s

The later fight was much shorter and less painful than the earlier fight. Still, there’s a lot of talk about going back to the ’80s. And that is highly unlikely. dr Krugman wrote:

What was the difference between these episodes? By the early 1980s, inflation was ingrained in the economy, in the sense that everyone expected high inflation not only in the short term but also for the foreseeable future; Firms set prices and negotiated wage deals on the assumption of persistently high inflation, creating a self-fulfilling inflationary spiral. It took a huge, sustained rise in unemployment to break this spiral. In contrast, in 2008, while people expected high inflation in the near future – probably because they extrapolated from higher gasoline prices – their medium to long-term inflation expectations remained fairly low.

And it’s the 2008 scenario that we’re seeing now.

What does that mean for mortgage rates?

All of this is important for mortgage rates. These usually fall when the economy enters a recession.

But this time it could be different. The Federal Reserve is determined to counter inflation by raising interest rates, as it did in the early 1980s. And in February 1982, mortgage rates hit their highest level ever: 17.6% for a 30-year fixed-rate mortgage.

Of course, no one is suggesting we’re likely to encounter rates this high any time soon — or, with any luck, not anytime soon. But don’t count on recession or stagflation dragging them down.

At some point in the coming week(s), markets could get a grip and current volatility could ease. At this point, I suspect that mortgage rates could start to rise again, at least until inflation shows clear signs that it has peaked and is beginning to fall.

But in the meantime I have no idea where these courses will go. And I doubt anyone else does.

Economic reports next week

By far the most important economic report due next week is due out on Friday and it will be the April Personal Consumption Expenditure (PCE) Index. It is the Fed’s preferred measure of inflation. And markets will hope this shows that inflation is starting to reverse and fall. If that’s the case, it could be good for mortgage rates.

On Wednesday, we look at the minutes of the last meeting of the Federal Open Market Committee (FOMC), the Fed’s policymaking body. Investors will ponder this in hopes of gaining additional clues to upcoming Fed action.

Possibly the most important reports below are in bold. The others are unlikely to move markets unless they contain shockingly good or bad data.

  • Tuesday — April new home sales. Plus May Purchasing Managers’ Indices (PMIs) for the Services and Manufacturing sectors from S&P Global
  • Wednesday – FOMC protocol and April durable goods orders
  • Thursday – Second reading (of three) of first quarter gross domestic product. Plus weekly new applications for unemployment insurance until April 21
  • Friday — April PCE data, including inflation, real disposable income, real consumer spending, and so on. Plus consumer sentiment index in May

Attention Wednesday and Friday!

Mortgage rate forecast for next week

I hate running away, but I can’t predict what will happen to mortgage rates next week. I’m sorry but with so much uncertainty and volatility I can’t even imagine what could happen.

Mortgage and refinancing rates usually move in tandem. And the elimination of the disadvantageous market refinancing fee last year largely closed a gap that had been growing between the two.

Meanwhile, another recent regulatory change has likely made mortgages for investment properties and vacation homes more accessible and less expensive.

How your mortgage interest rate is determined

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

And that depends heavily on the economy. So mortgage rates tend to be high when things are going well and low when the economy is in trouble.

your part

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

  1. Find your best mortgage rate – it varies greatly from lender to lender
  2. Improving Your Credit – Even a small bump can make a big difference in your rate and payments
  3. Save the Biggest Down Payment – Lenders like you have real skin in this game
  4. Keep your other borrowings low – The lower your other monthly obligations, the higher the mortgage you can afford
  5. Choose Your Mortgage Carefully – Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo, or other loan?

The time you spend getting those ducks in a row can result in you winning lower odds.

Remember, they’re not just a mortgage rate

Be sure to count all of your upcoming homeownership expenses when figuring out how much mortgage you can afford. So concentrate on your “PITI”. This is yours Principal (repays the amount borrowed), IInterest (price of borrowing), (property) TAxes and (homeowners) IInsurance. Our mortgage calculator will help you.

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

But there are other potential costs. So you will have to pay dues to the homeowners association if you choose to live anywhere with a HOA. And no matter where you live, you have to expect repair and maintenance costs. There is no landlord to call if something goes wrong!

Finally, you’ll find it hard to forget closing costs. You can see this in the annual percentage rate (APR) that lenders give you. Because that effectively spreads them out over the life of your loan, making it higher than your normal mortgage rate.

But maybe you can get help with these closing costs and Your deposit, especially if it is your first time buying. Read:

Down payment assistance programs in every state for 2021

Mortgage interest methodology

The Mortgage Reports receives daily rates based on selected criteria from multiple lending partners. We get an average interest rate and APR for each loan type shown in our chart. As we average a range of rates, you’ll get a better idea of ​​what you might find on the market. In addition, we calculate interest rates for the same types of credit. For example FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for the products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policies or position of Full Beaker, its officers, parent companies or affiliates.

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