Today’s mortgage and refinance rates
Average mortgage rates nudged lower again yesterday, confounding my prediction. The only predictable thing about markets right now is their unpredictability.
Having said that, there looks to be a good chance that mortgage rates today will fall again, perhaps appreciably. But, obviously, that’s far from certain.
Current mortgage and refinance rates
|Conventional 30 year fixed||3.296%||3.317%||-0.05%|
|Conventional 15 year fixed||2.719%||2.748%||-0.02%|
|Conventional 20 year fixed||3.125%||3.156%||-0.08%|
|Conventional 10 year fixed||2.702%||2.761%||-0.03%|
|30 year fixed FHA||3.418%||4.184%||-0.06%|
|15 year fixed FHA||2.774%||3.42%||Unchanged|
|5/1 ARM FHA||2.632%||3.232%||+0.02%|
|30 year fixed VA||3.225%||3.419%||-0.06%|
|15 year fixed VA||2.76%||3.102%||-0.08%|
|5/1 ARM VA||2.5%||2.473%||Unchanged|
|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?
The new Omicron variant of COVID-19 is likely to bring significant volatility to markets. And that will probably continue until scientists can tell us how transmissible and deadly it is — and how effective existing vaccines are likely to be against it.
Until then, expect mortgage rates to move up and down in line with emerging information. Good news about Omicron’s likely impact should see higher mortgage rates and bad news lower ones.
I’m changing my personal rate lock recommendations today to reflect the new Omicron situation. However, they may change again as data emerges about the new variant. And don’t be surprised if rates rise on some days.
But, for now, those rate lock recommendations are:
- FLOAT if closing in 7 days
- FLOAT if closing in 15 days
- FLOAT if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT 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 plummeted to 1.43% from 1.56%. (Very good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were much lower soon after opening. (Good 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 tumbled to $67.10 from $72.56 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices rose to $1,798 from $1,789 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 — dropped to 34 from 40 out of 100. (Good for mortgage rates.) A week ago, it was at 64. And a month ago at 72. “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 its 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. 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 a lot is 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?
This morning, markets are troubled by an interview that appeared in today’s Financial Times (paywall). In it, Moderna chief executive Stéphane Bancel talked about the effectiveness of existing vaccines against the new Omicron variant of COVID-19 compared to the Delta and other variants:
There is no world, I think, where [that effectiveness] is the same level. I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to … are like “this is not going to be good.”
— The Financial Times, “Moderna chief predicts existing vaccines will struggle with Omicron,” Nov. 30, 2021
It’s worth mentioning that not every virus expert agrees with the gloomy scenario that Mr. Bancel describes. And many believe existing vaccines are likely to prove only minimally less effective against the new strain. Meanwhile, as I reported yesterday, we might have newly engineered vaccines that are effective against all known variants “within a matter of weeks.”
But fears weren’t dispelled by the World Health Organization (WHO). AP reported yesterday:
The World Health Organization warned Monday that the global risk from the omicron variant is “very high” based on the early evidence, saying the mutated coronavirus could lead to surges with “severe consequences.”
— AP, “WHO warns that new virus variant poses ‘very high’ risk,” Nov. 29, 2021
Of course, we won’t know anything for sure until we get more data. But markets hate uncertainty. And those, both globally and in the US, reacted badly to reports of Mr. Bancel’s interview and the WHO statement.
Although not badly for mortgage rates. First thing this morning, it was looking as if today might be another good day for those.
But expect volatility until scientists get a clearer understanding of the threats Omicron poses. Those rates are likely to fall when negative news stories, like today’s, are dominating. And to rise when the news is better.
Things other than Omicron
Normally, we’d be exploring those economic reports due out this week that might move mortgage rates. In particular, Friday’s employment situation report, which recently has been the single most important such report in any month.
But, unless markets calm down before it’s published, which seems unlikely, I suspect it may be all but ignored among Omicron hysteria.
For more background, read Saturday’s weekend edition of this daily report.
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. 24 report puts that weekly average for 30-year, fixed-rate mortgages at 3.1% (with 0.7 fees and points), unchanged from the previous week.
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 were published on Nov. 18 and the MBA’s on Nov. 22.
Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until January.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
And none of these forecasters had any idea that Omicron might entirely change the models on which they’re based.
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.