Mortgage And Refinance Rates, April 21

Today’s mortgage and refinance rates

Average mortgage rates fell yesterday. But the movement was smaller than either Monday or Tuesday’s rises. And it may be a welcome breather for those rates rather than a significant change.

Mortgage rates today may rise. An larger increase first thing this morning has quickly moderated. But that suggests considerable volatility, meaning anything might happen later.

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.

You can never tell whether a sudden change of direction for mortgage rates is the start of something new or simply a blip. But the chances are yesterday’s fall was in the blip category. We’ve seen four other (mostly larger) decreases so far this month, two of which were on consecutive days. And they were soon swamped by bigger rises.

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 yesterday, were:

• The yield on 10-year Treasury notes held steady at 2.89%. (Neutral for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were 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 nudged up to $103.99 from $103.48 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices inched lower to $1,948 from $1,949 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 — climbed to 48 from 42 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 movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. 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 increase. 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 the coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

On Monday, economist Paul Krugman wrote an e-newsletter for The New York Times. In it, he explained what’s been going on with mortgage rates. I’m going to repeat a couple of his paragraphs just so you can hear what I’ve been saying in a different voice and from a slightly different perspective:

Although the Fed doesn’t directly determine mortgage rates, banks deciding how much to charge for loans pay a lot of attention to what they think the Fed will do in the future. If they expect short-term rates to go up, they’ll start charging more for home loans right away, because they don’t want to tie up their money since they’ll be able to get more later.

Sure enough, with everyone expecting the Fed to keep raising short-term interest rates several times over the next year, mortgage rates — and long-term rates for business borrowers — have already shot up more or less to pre-pandemic levels, even though the Fed has just begun to hike

Dr. Krugman was basing his figures on Freddie Mac’s weekly survey (see the latest, out today, below), and that’s why he believes mortgage rates are roughly at pre-pandemic levels. Those who follow daily rates know they’re already higher than those — and (excepting yesterday) still rising.

More rate rises ahead?

Regular readers will be aware of a second looming threat to mortgage rates. On May 4, the Federal Reserve is due to unveil its plans for reducing its holdings of mortgage bonds.

Those rates could move either way in the wake of that announcement. If the Fed’s plans are gentler than markets fear, mortgage rates could fall. But if they’re more aggressive they could rise further.

We shan’t know for sure until that day. But, judging from top Fed officials’ rhetoric recently, I’m guessing more aggression and higher rates are more likely.

Read the weekend edition of this daily article for more background.

Recent trends — 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 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.

Freddie’s Apr. 21 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.11% (with 0.8 fees and points), up from the previous week’s 5%.

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 remaining three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Apr. 19, Freddie’s on Apr. 18, and the MBA’s on Apr. 13.

Forecaster	Q2/22	Q3/22	Q4/22	Q1/23
Fannie Mae	4.6%	4.5%	4.5%	4.5%
Freddie Mac	4.8%	4.8%	5.0%	5.0%
MBA	4.7%	4.8%	4.8%	4.8%

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. I’m afraid I’m less optimistic than any of them.

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.