Mortgage And Refinance Rates, March 21

Today’s mortgage and refinance rates

Average mortgage rates edged lower last Friday. But, unfortunately, the decrease was too slight to make much difference to borrowers. And March continues to be a bad month for those rates.

So far this morning, markets are pointing to higher mortgage rates today. Of course, that could change as the hours pass. But early movements look strong.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Don’t lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer–term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.

There’s close to a consensus among people who study mortgage rates that those rates are likely to climb for months to come, probably into 2023.

However, many think the speed of increases will begin to slow, perhaps soon. And that we’ll see longer and more frequent times when mortgage rates fall modestly, though within an overall upward trend.

So, my personal rate lock recommendations for the longer term 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 last Friday, were:

• The yield on 10-year Treasury notes climbed to 2.23% from 2.15%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mixed soon after opening. (Neutral 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 $109.64 from $104.60 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices decreased to $1,927 from $1,930 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 – jumped to 40 from 32 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 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 might 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:

1. 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’
2. Only “top–tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
3. 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
4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
5. 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 will happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Mortgage rates began rising at the start of August last year. To begin with, the increases were fairly gentle. But, by mid–December, they began to quicken. And they’ve mostly been rising unusually sharply ever since. If you prefer such information in a graphic form, check out Freddie Mac’s graph.

This year’s rises have mostly been driven by inflation. And consumer prices were already running at a 40–year high in February, before oil prices spiked. So, there’s little sign of that easing anytime soon. Indeed, Russia’s invasion of Ukraine has already pushed up several commodity prices to record highs, not just those for oil.

Part of the reason markets are so troubled by inflation is that the Federal Reserve has a duty to contain it. And both the main levers it can use to lower prices (interest–rate hikes and asset sales) tend to push mortgage rates higher.

So I struggle to see any prospect of mortgage rates falling far or for long. And my main hope is that they soon start to climb more slowly.

That’s not to say that sharp and continuing falls in those rates are impossible. Some catastrophic event that transforms the global economy might send them tumbling. But let’s hope that remains unlikely.

Read the weekend edition of this daily article, published last Saturday, for more background.

Recent trends

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 that 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, the rises have grown more pronounced since last September, though not consistently so.

Freddie’s March 17 report puts that weekly average for 30–year, fixed–rate mortgages at 4.16% (with 0.8 fees and points), up from the previous week’s 3.85%.

Note that Freddie expects you to buy discount points (“with 0.8 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would be closer to the ones we and others quote.

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 March 17 and the MBA’s on Feb. 25. But Freddie now publishes these forecasts every quarter, most recently on Jan. 21. So its figures are already looking very stale.

Forecaster	Q1/22	Q2/22	Q3/22	Q4/22
Fannie Mae	3.7%	3.8%	3.8%	3.9%
Freddie Mac	3.5%	3.6%	3.7%	3.7%
MBA	3.8%	4.0%	4.1%	4.3%

Note that the MBA’s figures were issued before Russia invaded Ukraine. Of course, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.

But I still don’t understand why Fannie remains convinced that mortgage rates will rise only modestly. Just for it to be correct about the current quarter, which has only a short time left to run, those rates would have to plunge to extraordinary lows. And I just don’t see its grounds for expecting that.

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.