Mortgage rates today, June 4 and rate forecast for next week
Today’s Mortgage and Refinance Rates
Average mortgage rates barely rose yesterday. But, during this week, they have increased significantly.
My apologies for not providing forecasts for these rates again next week. Markets are still stumbling blindly with no apparent underlying direction. And the odds of them rising or falling over the next seven days are about equal.
Current mortgage and refinance rates
|Program||Mortgage rate||APR*||To change|
|30-year fixed conventional||5.445%||5.47%||+0.05%|
|15-year fixed conventional||4.541%||4.572%||+0.09%|
|20-year fixed conventional||5.344%||5.379%||+0.07%|
|10-year fixed conventional||4.666%||4.732%||+0.08%|
|30-year fixed FHA||5.341%||6.16%||-0.03%|
|15-year fixed FHA||4.787%||5.239%||+0.01%|
|30-year fixed PV||4.838%||5.054%||+0.01%|
|15-year fixed VA||5.522%||5.874%||-0.1%|
|Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.|
Should you lock in a mortgage rate today?
Don’t lock in on a day when mortgage rates look set to drop. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. Thus, they do not change daily to reflect fleeting sentiments in volatile markets.
Markets continue to show unusual volatility. We had three weeks in May when mortgage rates fell more than they rose, according to data from Mortgage News Daily. But last week wiped out most of those gains. And there have only been two days since May 9 where they were higher than they were last night.
It will not be clear for some time if last week was an anomaly in a new downtrend. Or if the previous three weeks were an anomaly in the multi-month uptrend. I would put my money on the latter if I had to bet. But no one can be sure.
Part of the reason I always suggest locking in your rate soon is that I’m naturally cautious. But I also keep in mind that “losses outweigh gains” in most people’s minds.
And so, my personal rate lock recommendations remain:
- TO BLOCK if closing seven days
- TO BLOCK if closing 15 days
- TO BLOCK if closing 30 days
- TO BLOCK if closing 45 days
- TO BLOCK 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
The same hopes and fears have been in the minds of bond markets for weeks and months. The fears are largely about the persistence of high inflation and the possibility that the Federal Reserve’s anti-inflationary plans will tip the economy into recession. Hopes are that investors have already sufficiently anticipated these events and priced them into bond prices at an appropriate level.
Of course, no one can be sure what will happen. And news that affects their probability can be read in at least two ways.
For example, yesterday’s better-than-expected employment numbers suggest we are still a long way from a recession. But the same numbers suggest the Fed could act even more aggressively on inflation, increasing the likelihood of such a recession.
Thus, yesterday, mortgage rates rose decisively in the morning, celebrating the good economic news. But they pulled back later in the day as investors pondered how the news might affect the Fed’s plans. They only ended up a little higher. Yesterday morning, I warned precisely of this possibility.
And now you know why mortgage rates and markets are so volatile and unpredictable. Investors play a fiendishly complicated game similar to three-dimensional chess. But this is made even more difficult by the high volume of unknown variables heading their way down the road.
Unsurprisingly, all of this is making investors nervous. And, in the absence of any real certainty, they are now much more susceptible than usual to rumors and mood swings.
What’s next for mortgage rates?
Obviously, no one knows what’s coming. But I and many other mortgage rate watchers worry that we haven’t seen the end of high inflation. Russia’s invasion of Ukraine continues to wreak havoc on many commodity prices and supply chains.
Meanwhile, yesterday’s rapid rise in prices and strong jobs report may encourage the Fed to act even more aggressively to counter inflation than it has signaled so far. And that makes the chances of a recession even greater. We will learn more about the Fed’s plans at a press conference on June 15.
We could see mortgage rates rise drastically soon, if I’m right. But, as I said last week, let’s hope I’m wrong.
Economic reports next week
With one exception, next week will be exceptionally quiet for economic reports. That exception is the Consumer Price Index (CPI), which is due out Friday morning. Of course, it’s a measure of inflation, which is the market’s current obsession.
The potentially most important reports below are highlighted in bold. The others are unlikely to move the markets much unless they contain surprisingly good or bad data.
- Thursday – New weekly unemployment insurance claims through June 4
- Friday — May consumer price index, including core CPI. Plus June Consumer Sentiment Index
Watch out Friday!
Mortgage interest rate forecast for next week
I think maybe mortgage rates will probably go up again soon. But I don’t know if it will start next week. So, again, I give up on predicting where they will be heading over the next seven days.
Mortgage and refinance rates generally move in tandem. And the removal of unfavorable market refinancing charges last year has largely eliminated the gap that had grown 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 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.
But you play an important role in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Shop around for your best mortgage rate – They vary widely from lender to lender
- Boost your credit score – Even a small bump can make a big difference to your rate and payments
- Save the biggest down payment possible – Lenders like you to have real skin in this game
- Keep your other borrowings small — The lower your other monthly commitments, the higher the mortgage you can afford
- Choose your mortgage carefully – Are you better off with a conventional, conforming, 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) Iinsurance. 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) that lenders will quote you. 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. Lily:
Down payment assistance programs in every 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 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 the rates for the same loan types. For example, fixed FHA with fixed FHA. The result is a good overview of the daily rates and their development over time.
The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.