The best day of the week to lock in a mortgage rate is Monday. This is because the history of mortgage rates shows it's the least volatile day of the week when it comes to the mortgage market. Potential homebuyers will want to avoid volatility.
Rates are constantly changing weekly, daily and even hourly. The main factors for this flux are the state of the economy, inflation and the Federal Reserve Board. While these things are out of your hands, you can control your credit score, which has a definite impact on your interest rate.
Going into 2024, most economists agree that rates should decline somewhat at the start of the year and pull back gradually during each quarter to around 6% by year-end. Here's what forecasters have to say about their predictions for this year.
So if you're on the fence about buying or refinancing a home this winter, know that January and February bring some of the lowest mortgage rates of the year.
The lender is who sets the rate and therefore when all needed paperwork and steps are taken they can lock the rate anytime they would like. More than likely this is all computerized these days so as long as the representative was able to go in and lock it on a Sunday then more than likely that is what occurred.
Long answer: Every morning, Monday through Friday, banks get a fresh rate sheet that has pricing for that day. Mortgage rates don't change over the weekend, but the rate you're quoted on Friday can differ from Monday's numbers. In fact, the rate you're quoted on Friday morning can change by Friday afternoon!
When you lock your interest rate, you're protected from rate increases due to market conditions. If rates go down prior to your loan closing and you want to take advantage of a lower rate, you may be able to pay a fee and relock at the lower interest rate. This is called "repricing" your loan.
After all, higher rates equate to higher minimum payments. So, you may be wondering if, and when, mortgage rates might fall to 3% or lower again - and whether or not it's worth waiting to buy a home until they do. Although rates could fall to 3% again one day, it's not likely to happen any time soon.
Mortgage rates have been historic in their own right during the past few years. The average 30-year fixed rate reached an all-time record low of 2.65% in January 2021 before surging to 7.79% in October 2023, according to Freddie Mac.
Interest rates reached their highest point in modern history in October 1981 when they peaked at 18.63%, according to the Freddie Mac data. Fixed mortgage rates declined from there, but they finished the decade at around 10%.
Mortgage rates change all the time. So a good mortgage rate could look drastically different from one day to the next. Right now, good mortgage rates for a 15-year fixed loan generally start in the high-5% range, while good rates for a 30-year mortgage typically start in the mid-6% range.
Higher interest rates typically have two effects on the housing market that can help drive down prices: They price some buyers out of the market, which is good for the buyers who remain, and they typically have the effect of putting downward pressure on housing prices, which is good for buyers.
Average 30-Year Fixed Rate
After hitting record-low territory in 2020 and 2021, mortgage rates climbed to a 23-year high in 2023. Many experts and industry authorities believe they will follow a downward trajectory into 2024.
You can lock in your interest rate as soon as you've been approved for the mortgage, though you may not always want to do so immediately. Closing on the home could take several weeks, and you want to be sure that you have ample time to complete the homebuying process before your lock-in policy's expiration date.
Each morning, Monday through Friday, banks and their loan officers get a fresh “mortgage rate sheet” that contains the pricing for that day... Mortgage rates do not change during the weekend, though pricing can definitely change between Friday and Monday.
Borrowers today are grappling with some of the highest mortgage rates we've seen in decades — but they aren't actually the highest they've ever been. In the fall of 1981, the average 30-year mortgage rate reached an all-time high of 18.63%.
2021: The lowest 30-year mortgage rates ever
And it kept falling to a new record low of just 2.65% in January 2021. The average mortgage rate for that year was 2.96%. That year marked an incredibly appealing homeownership opportunity for first-time homebuyers to enter the housing market.
Mortgage rate predictions 2024
The MBA's forecast suggests that 30-year mortgage rates will fall into the 6.1% to 6.9% range in 2024, and NAR's forecast is very similar, predicting that rates will remain in the 6.1% to 6.8% range.
After its December 2023 session, the Fed forecasted it would make three quarter-point cuts by the end of 2024 to lower the benchmark rate to 4.6%. Prices have started to come down, but the group has signaled it wants to see more positive data before pulling the trigger.
Experts have forecasted that mortgage rates will go down in 2024, but exactly when they'll start trending down depends on the economy and when the Federal Reserve starts lowering the federal funds rate.
Yes, to some degree, mortgage interest rates are negotiable. Mortgage lenders have some flexibility when it comes to the rates they offer. However, in many cases getting a lower rate on your loan will come with a price, such as paying “points” to get a lower rate.
Along with a standard rate lock on a mortgage, some lenders offer a float-down lock, which is designed to help you take advantage of lower rates if they become available before you close the loan. Float-down locks come with a win-win: You get the assurance of your rate now, plus a lack of regret if that rate drops.
When interest rates drop, consider refinancing to shorten the term of your mortgage and pay significantly less in interest payments. Switching to a fixed-rate mortgage—or to an adjustable-rate one—can make sense depending on the rates and how long you plan to remain in your current home.