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The 30-year fixed jumped to 7.28% this week, up from 7.03%, according to Freddie Mac's October 1 survey. The 15-year moved to 6.60% from 6.42%. A year ago those averages were 6.34% and 5.55%. That's six straight weekly increases, and this one was the largest of the bunch, a full quarter point in seven days.
On a $350,000 loan, a quarter point is about $59 a month in principal and interest, roughly $2,395 now versus $2,336 last week. Compared with a year ago, it's about $219 a month more. Real money. But the thing a week like this actually changes isn't whether you should buy. It's how you handle the lock.
A rate lock is your lender's promise to hold a specific rate for a set window, usually 30 to 60 days, while your loan closes. In a calm market, nobody thinks hard about it. When rates can move a quarter point between Thursdays, the lock is where buyers either protect themselves or get caught.
If you're already under contract in the Houston area, my advice is simple: talk to your loan officer about locking now, and make sure the lock window covers your closing date with a few days to spare. Appraisals, HOA documents, and title work in Texas don't always run on schedule, and a lock that expires three days before closing can cost you a rate you thought was yours.
If you're still shopping, ask lenders about two things. First, a lock-and-shop program, which lets you lock a rate before you have a contract and apply it once you find the house. Second, a float-down option, which lets you take a lower rate if the market drops before closing. Both have conditions and sometimes a fee, so get the terms in writing. Not every lender offers them, and that alone is a reason to compare more than one.
The usual caveat, and I mean it: these are national averages for borrowers with strong credit and 20% down. I'm a real estate broker and REALTOR®, not a lender. Your credit, loan type, and down payment all move the number, so get a real quote before you plan around it.
I can't tell you where rates go next Thursday, and neither can anyone else. What I can tell you is that a buyer with a lock in hand and a payment ceiling already set is in a far better spot than one refreshing a rate chart. Control the parts you can control.
If you're weighing a move anywhere in the Houston area, I'm glad to talk it through with no obligation. Reach me, Kevan Pewitt, at Houston Prime Realty. Call or text (281) 500-7077.
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