Today’s mortgage and refinance rates
Average mortgage rates rose appreciably yesterday, setting a new two-year high. And it was all a result of that afternoon’s Federal Reserve event.
Soon after opening, markets were suggesting mortgage rates today might rise again. But we’re in a period of high volatility. So that might easily change.
Current mortgage and refinance rates
|Conventional 30 year fixed||3.896%||3.92%||+0.13%|
|Conventional 15 year fixed||3.192%||3.231%||+0.13%|
|Conventional 20 year fixed||3.676%||3.716%||+0.26%|
|Conventional 10 year fixed||3.117%||3.187%||+0.12%|
|30 year fixed FHA||3.989%||4.769%||+0.15%|
|15 year fixed FHA||3.175%||3.789%||+0.06%|
|5/1 ARM FHA||3.75%||4.056%||+0.04%|
|30 year fixed VA||4.048%||4.254%||+0.09%|
|15 year fixed VA||3.388%||3.73%||-0.11%|
|5/1 ARM VA||4.128%||3.351%||+0.21%|
|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?
I’m still suggesting you lock your rate today or very soon. Of course, the future’s never certain and I could be proved wrong.
But yesterday’s Fed events made rises more likely. And we’ll now likely have to see something massive occur for these rates to change direction in a sustained way.
So, 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 rose to 1.81% from 1.79%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were sharply higher. (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 $88.12 from $86.68 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices fell to $1,809 from $1,833 an ounce. (Bad 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 — edged lower to 37 from 39 out of 100. (Good 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 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 are likely to rise. However, 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.
A lot is going on at the moment. 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?
If you want to know the background to Federal Reserve events yesterday, please read Tuesday’s edition of this daily report. But, to cut a long story short, the Fed made clear that it was prioritizing fighting inflation over pretty much anything else. And that’s bad for mortgage rates.
At his 2:30 p.m. (ET) news conference, Federal Reserve Chair Jerome Powell yesterday clarified two points that are especially relevant to those rates:
- The Fed’s likely to hike its own interest rates (and thus many others) modestly four times this year, starting in mid-March. But Mr. Powell refused to rule out raising them after each of the meetings of the Federal Open Market Committee (FOMC), its monetary policy body, scheduled for the rest of this year. And there are seven more of those on the FOMC calendar
- The Fed might begin to reduce its balance sheet later this year. For mortgage rates, that might be even more worrying
What’s so special about the Fed’s balance sheet? Well, for the last couple of years, the central bank has been keeping mortgage rates artificially low by buying huge quantities of a type of bond called a mortgage-backed security (MBS). Those purchases appear as assets on its balance sheet.
The Fed announced last November that it would wind down (“taper”) those purchases according to a December-to-June timetable. Then it said it would stop adding them to its balance sheet in March, reducing the original period.
A tapering exercise sees a reduction each month in the amount bought until that reaches zero. But, even then, it doesn’t stop all purchases. The Fed keeps its asset holdings steady by using money it receives from maturing MBSs to buy new ones. It’s neutral.
But the time comes when it must begin to sell its MBSs. If buying MBSs keeps mortgage rates artificially low, selling them pushes those rates higher.
The last time the Fed ended a tapering program, it maintained its MBS holdings for around 30 months before beginning to sell. This time, Mr. Powell said it might begin sales in 2022. And that would mean a maximum of nine months after the end of tapering.
That’s a bit of a shock. Of course, the move won’t directly affect mortgage rates until sales actually begin, later in the year. But it could do so indirectly from now on. Because investors price such considerations into their trading before changes are implemented.
Meanwhile, this morning’s gross domestic product figures for the last quarter of 2021 were better than expected. And that normally wouldn’t help mortgage rates, either.
Recently — Updated today
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, 2021, 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 last September, the rises have grown more pronounced, though not consistently so.
Freddie’s Jan. 27 report puts that weekly average for 30-year, fixed-rate mortgages at 3.55% (with 0.7 fees and points), barely changed from the previous week’s 3.56%. But that Thursday report won’t include the previous day’s appreciable rise. And mortgage rates actually rose over the Thursday-to-Thursday 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 four quarters of 2022 (Q1/22, Q2/22, Q3/22, Q4/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Jan. 19 and Freddie’s and the MBA’s on Jan. 21.
Personally, I was surprised that Fannie Mae only slightly increased its rate forecasts in January. It believes that rates for 30-year, fixed-rate mortgages will average 3.2% over the current quarter. But, on the day its figures were published, we reported those for conventional loans were already up to 3.87%.
Do Fannie’s economists expect those rates to plummet later this month or in February or March and remain lower in the following quarters? If so, they know something that I don’t. And that their peers in Freddie and the MBA’s teams don’t, either, though I’m less optimistic than any of them.
Of course, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
Find your lowest rate today
You should comparison shop 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.