This Week’s Mortgage Rate Trends: Low Rates Aren’t Going Away Soon

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What Will Mortgage Rates Do This Week?

Where mortgage rates move from week to week is dependent on a number of factors, such as the overall direction of the economy, the rate of inflation, competition among lenders, and policy decisions of the Federal Reserve Bank. And right now, these factors are pushing and pulling current interest rates into a bit of a stasis.

Over the past five weeks, the average 30-year fixed mortgage rate has stayed within a narrow range of 2.94% to 3%, according to Freddie Mac. And barring any surprises, it doesn’t look likely that rates will make a big move in either direction this week.

What the Experts Are Saying About Mortgage Rate Trends

Many experts are predicting that mortgage rates will rise, but they expect this to happen over the long term. While rates have already risen this year from their all-time lows, they are still low compared to the mortgage rate history of just a few years ago. 

And we may not see mortgage and refinance rates hit pre-pandemic levels until 2022 or later. In the coming month, experts are forecasting that mortgage rates will continue to stay low. So borrowers still have a chance to lock-in an exceptionally low rate for the long term.

DateAverage 30-year fixedAverage 15-year fixedAverage 5/1 ARM
Jun. 18, 20213.1617%2.4204%3.2007%
Jun. 11, 20213.079%2.3583%3.2408%
Jun. 4, 20213.0998%2.3682%3.154%
May. 28, 20213.0855%2.3743%3.1409%

How Small Mortgage Rate Changes Affect Your Budget

Mortgage rates fluctuate from day to day and week to week, but these movements are typically small. Significant changes to average mortgage rates happen over months and years. However, even a small change in mortgage rates will have an affect on your budget.

Under normal circumstances, mortgage rates typically move by less than 0.1% in either direction. Small changes in interest rates from week to week may not heavily influence your homebuying or refinance plans. But over a month or more, this movement can add up if rates shift steadily in one direction.

Loan TermLoan AmountMortgage RatePaymentTotal Interest
30 Years$350,0002.95%$1,466$177,871
30 Years$350,0003.05%$1,485$184,641
30 Years$350,0003.15%$1,504$191,487
30 Years$350,0003.25%$1,523$198,415
30 Years$350,0003.35%$1,542$205,427

A 0.1% change in rate for a 30-year $350,000 mortgage can cost you, or save you, $19 a month and around $7,000 in interest over the life of the loan. Increasing interest rates have a big impact on whether or not it makes sense to refinance because you’ll want the ongoing savings to outweigh the upfront costs. Rising rates can also impact how much house you can afford. But potential homeowners can more easily adjust their home buying budget to accommodate higher interest rates.

How to Make Sure You Get the Best Rate in Any Environment

The mortgage rate you get is based on a number of factors, some are within your control, and others aren’t. Broader economic factors, like inflation and the health of the overall economy can push mortgage and refinance rates up or down. Mortgage interest rates can change based on location and even the type of property. 

On a personal level, your credit score and loan-to-value ratio (LTV) are critical to getting the lowest rate possible. So saving up for a bigger down payment and taking the time to build your credit score are important goals to work on in the months and years leading up to a home purchase. Aim to have a credit score of 740 or higher and an LTV of 80% or less.
In the short term, the most important thing you can do to ensure you’re getting the best deal on your home loan or mortgage refinance is to shop around to find the best mortgage lender for your situation. Every lender will evaluate your finances differently, which means the interest rate and fees you’ll pay will vary with each lender, even if the loan type, and term are the same. So it’s a good idea to submit applications with multiple lenders, including banks, brokers, and online mortgage lenders. Having different offers in hand can make it easier to negotiate a better rate or lower fees.