Today’s Mortgage Rates, June 20, 2022 | Rates Back on Verge of 6% After Fed Hike

Looking at today’s mortgage rates a few rates boasted increases. The averages for both 30-year fixed and 15-year fixed mortgages both saw an increase. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) also were raised.

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

Mortgage Rate Forecast: What Drives Changes in Mortgage Rates?

As economic activity fell due to the pandemic, rates dropped initially. However, as the pandemic progressed we began to experience supply chain shortages, which drove inflation, and interest rates, higher.

Today, we find ourselves in a similar situation, where the very issues that are behind the currently high inflation could eventually lead to slower economic growth. A sagging economy typically goes hand in hand with lower mortgage rates.

What will actually happen with mortgage rates is anyones guess, but at the moment most experts believe rates won’t drop. The impact of the Russian invasion of Ukraine and the Chinese COVID lockdown on supply chains will likely lead to higher inflation.

Until inflation declines, it is unlikely that we will return to the days of low mortgage rates. “Until inflation is under control, the risk is certainly that rates move higher,” Danielle Hale, chief economist at Realtor.com told NextAdvisor.

Is It a Good Time to Buy a Home With Rates Where They Are?

Homebuyers are facing high prices and rising interest rates, a combination that can quickly reduce one’s purchasing power.

This doesn’t mean that the current real estate market conditions have to delay your homebuying plans. Don’t rush into a home purchase because you’re afraid rates or prices will increase forever. You should instead take the time to find the right home for you at an affordable price if now is a good time for you to buy.

Homebuying is a better move when you have a long-term timeframe for living in the home. By giving yourself more time in the home, you’ll be able to weather the inevitable market fluctuations. When purchasing a home, stick to your budget and only purchase what you can comfortably afford. Generally, experts recommend not spending more than 28% of your pretax income on housing.

Why Is It Important to Look at the History of the 30-Year Fixed Mortgage Rate?

Compared to 2020 and 2021, today’s rates are higher, but looking at prior years they aren’t outside of normal ranges. What this means is current mortgage interest rates are still very good from a long-term view despite breaking through the psychological barrier of 5%.

While NextAdvisor typically uses Bankrate data on mortgage rates, this chart pulls data from the government-sponsored entity, Freddie Mac. The Freddie Mac data stretches back decades, giving us a better view of the historical rate trends.

Closing Costs & Loan Fees

The industry term for the upfront fees you pay when you get a home loan is closing costs. This includes lender fees and escrow fees, such as taxes and insurance. Certain closing costs vary by loan size, but overall you can expert to pay 3% to 6% of the total loan balance.. Paying attention to the closing costs you pay is important because the higher your closing costs, the higher your annual percentage rate (APR) will be.

Current Mortgage Refinance Rates

Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their mean rates climb. If you’ve been considering a 10-year refinance loan, just know average rates also moved up.

Take a look at today’s refinance rates:

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Source: time.com | Jason Stauffer – Staff Writer