Today’s mortgage and refinance rates
Average mortgage rates fell yet again yesterday, sustaining the recent run of falls. However, some of that may have been a hangover from Friday’s fall as lenders updated their rate cards on Monday to reflect changes late last week.
First thing, mortgage rates today looked likely to move modestly lower or hold steady. But that could change as investors digest this morning’s producer price index. Indeed, our rates table today suggests some have already been rising.
Current mortgage and refinance rates
|Conventional 30 year fixed||3.124%||3.143%||+0.01%|
|Conventional 15 year fixed||2.566%||2.594%||Unchanged|
|Conventional 20 year fixed||2.929%||2.961%||+0.02%|
|Conventional 10 year fixed||2.481%||2.538%||Unchanged|
|30 year fixed FHA||3.141%||3.9%||+0.02%|
|15 year fixed FHA||2.536%||3.18%||+0.01%|
|5/1 ARM FHA||2.506%||3.152%||+0.02%|
|30 year fixed VA||3.044%||3.236%||+0.05%|
|15 year fixed VA||2.627%||2.967%||Unchanged|
|5/1 ARM VA||2.549%||2.371%||+0.02%|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
Should you lock a mortgage rate today?
Even as rates continue on their downward track, I continue to believe rises will arrive soon. Read on for more information.
Anyway, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- LOCK if closing in 45 days
- LOCK if closing in 60 days
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:
- The yield on 10-year Treasury notes edged down to 1.44% from 1.48%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were mostly higher soon after opening. (Bad for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
- Oil prices climbed to $82.79 from $81.61 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices nudged up to $1,830 from $1,825 an ounce. (Neutral for mortgage rates*.) In general, it is better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower
- CNN Business Fear & Greed index — inched higher to 87 from 86 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones
*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve their former high levels until things settle down.
So use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to fall a little or hold steady. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.
Important notes on today’s mortgage rates
Here are some things you need to know:
- Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care
- Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
- When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
- Refinance rates are typically close to those for purchases. And a recent regulatory change has narrowed a gap that previously existed
So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.
Are mortgage and refinance rates rising or falling?
How come I’m consistently predicting that mortgage rates will rise when they keep falling? Well, it’s because I doubt that markets’ current, counterintuitive actions can last.
Stocks and bonds
We’re seeing frequent all-time highs for stock market indexes at the same time that mortgage rates are falling. And that’s a relatively rare occurrence.
Normally, investors buy stocks when they’re confident about the economy’s prospects. And they sell stocks and buy bonds when they’re worried about the future.
Of course, they prefer stocks because those produce a much higher return than bonds. But they’re also riskier. Bonds, on the other hand, are less profitable but most are much safer. Indeed, they’re a safe haven during stormy times.
So buy stocks when the economy’s looking safe. And buy bonds when it’s looking iffy. But, right now, investors are buying both.
What’s that got to do with mortgage rates?
Mortgage rates are largely determined by a type of bond, called mortgage-backed securities. When lots of people are buying those, the price rises. And (as a mathematical certainty) yields and mortgage rates fall.
And that’s what’s happening now. But why? Record stock indexes show that investors have confidence in the economy. So the high demand for bonds seems strange.
Reasons to be fearful …
The Federal Reserve just issued its latest financial stability report. And it’s worried. The Guardian this morning summed up the Fed’s message:
The surge in risky asset prices this year has made them increasingly susceptible to a tumble if economic growth takes a turn for the worse, the pandemic escalates, or investors lose confidence.
So it’s not silly to be buying bonds. But, if you’re worried, why would you still be buying shares?
… And reasons to be cheerful
And there are grounds for not being worried. In its US Economic Outlook e-newsletter yesterday, Comerica Bank’s chief economist wrote:
It feels like we are at a turning point in the economic history of the global coronavirus pandemic. The U.S. caseload for the delta variant dropped through mid-October. Consumer and business confidence has started to improve. The pace of hiring has picked up. We may have to endure more waves of contagion, yet the potential economic drag from future waves appears to be diminishing.
Add to that the $1 trillion infrastructure plan that passed Congress last Friday and the economic outlook looks rosy.
And that’s why I think mortgage rates will rise again soon. In my view, as investors’ confidence grows, they’ll turn away from bonds. And mortgage-backed securities’ yields will rise as demand falls, meaning mortgage rates will go up, too.
Unless the Fed’s right, of course. But you may think its warnings are unlikely to come true, at least for some months to come.
For more background, read last Saturday’s weekend edition of these daily reports.
Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.
The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages.
Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.
Freddie’s Nov. 4 report puts that weekly average for 30-year, fixed-rate mortgages at 3.09% (with 0.7 fees and points), down from the previous week’s 3.14%.
Expert mortgage rate forecasts
Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their current rate forecasts for the remaining, current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s and Freddie’s were published on Oct. 15 and the MBA’s on Oct. 18.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
All these forecasts expect at least modestly higher mortgage rates fairly soon.
Find your lowest rate today
Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.
But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.
But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:
Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.