Mortgage rates have flattened, with the average 30-year mortgage rate staying mostly flat at 6.63% APR in the first week of August. This is three basis points lower than a week ago and 13 basis points higher than July’s monthly average of 6.5%.
What Mortgage Rates Did This Week
The lowest average daily rate was 6.47% on Thursday, Aug. 6, according to Zillow data, which was a 12-basis-point drop from the previous day’s average. The highest average daily rate was 6.7% on Tuesday, Aug. 4, which was on par with where rates ended the last week of July.
Mortgage lenders are considering how July’s job data will be interpreted by central bankers. Futures traders have been expecting that the Federal Reserve might rein in inflation by raising borrowing rates in September. However, doing so can put more pressure on the labor market and drive up unemployment.
What Mortgage Rates Could Do Next Week
Next week, we’ll get the Consumer Price Index, a key indicator of inflation. Current federal inflation data is from June, before the ceasefire in Iran crumbled. July’s data will give us our first real look at the economic effects of the resumed attacks.
Analysts will be looking at this data in relation to Friday’s jobs report. Odds of a rate hike in September will likely drop if unemployment is rising, but inflation isn’t as bad as some fear. The odds could also fall if both inflation and unemployment are relatively flat.
Either scenario would likely bring lower mortgage rates next week. On the other hand, odds of a rate hike in September will likely increase if unemployment is manageable, but inflation is rising faster than expected. Rising odds of a September rate hike would push mortgage rates up.
If unemployment and inflation are both rising, it will be harder to gauge central bankers’ potential rate decision just yet.
How Borrowers Can Get the Lowest Rate
While it’s impossible to time the market to get the lowest rate, there are certain predictable patterns that can guide your strategy. For example, news from Iran that points to a possible peace agreement tends to lead to lower mortgage rates the next day. If you’re hearing positive rumblings, it could be a good time to apply.
Timing is only part of the equation, though. You should also shop around with multiple lenders to compare term options and find the lowest rate. We recommend getting quotes from at least three lenders.
And if the rates you’re seeing are just not in your budget right now, you can make the most of this time by focusing on tightening up your financial profile. By paying down existing debts and working on your credit health, you’ll be in a better position to score a good deal once rates come down.
Original reporting: KTBS 3 (Shreveport) — read the source article.
