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Mortgage And Refinance Rates, May 24

Today’s mortgage and refinance rates

Average mortgage rates inched higher yesterday, canceling out last Friday’s similarly tiny fall. The exceptional volatility we’re seeing in some markets is simply not translating into those for these rates. At least, not yet.

By approaching 10 a.m. (ET) this morning, it was looking as if mortgage rates today might fall. But it’s been common recently for those rates to change direction later in the day. So nothing’s certain.

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 5.473% 5.499% +0.04%
Conventional 15 year fixed 4.655% 4.688% +0.08%
Conventional 20 year fixed 5.368% 5.403% +0.13%
Conventional 10 year fixed 4.516% 4.572% -0.09%
30 year fixed FHA 5.51% 6.265% +0.04%
15 year fixed FHA 4.865% 5.317% +0.12%
30 year fixed VA 5.05% 5.265% +0.18%
15 year fixed VA 5.526% 5.878% +0.7%
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?

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.

It’s felt like a hectic couple of weeks. Dramatic swings in some markets are grabbing headlines. And there were a couple of excellent days for mortgage rates two weeks ago. But, since then, there has been only one appreciable rise, which was soon canceled out by a similar fall. And, apart from those, we’ve seen only minor ups and downs.

True the small falls over that period have slightly outweighed the small rises. But mortgages rates last night were only a few basis points (a basis point is one-hundredth of one percent) lower than they were 10 working days ago.

Most people are happier missing out on a gain than suffering a loss. And, on that basis, 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 fell to 2.77% from 2.82%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
  • Major stock indexes were 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 nudged up to $110.94 from $110.50 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
  • Gold increased to $1,858 from $1,854 an ounce. (Neutral for mortgage rates*.) It is generally 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 lower to 12 from 13 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 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 fall. 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 broader 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?

Mortgage rates had been rising consistently for more than six months — until a couple of weeks ago. They’re currently appreciably lower than they were on May 6. But nearly all the decrease happened over the following two working days. And, since then, rates have barely moved overall.

There are a couple of events due this week that could push those rates higher or lower. On Wednesday afternoon, the Federal Reserve will publish the minutes of the last meeting of its monetary policy body, the Federal Open Market Committee or FOMC. Investors will be studying those in depth to see if the committee’s members were in private more or less willing to tackle inflation aggressively than currently believed.

Then, on Friday morning, a particularly important inflation report will be released. Mortgage rates might catch a break if the figures suggest inflation might have peaked in April. But they might rise if the news is less good.

It’s unlikely either event will turn mortgage rates around by itself. And my suspicion remains that those rates will continue to move higher once markets settle down, driven by uncomfortably hot inflation.

If I’m right, these last couple of weeks will have been a welcome breather for mortgage rates — and nothing more. But I could easily be wrong.

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

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.

Rates then bumbled along, moving little for the following eight or nine months. But they began rising noticeably that September. Unfortunately, they’ve been mostly shooting up since the start of 2022.

Freddie’s May 19 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.25% (with 0.9 fees and points), down from the previous week’s 5.3%.

Note that Freddie expects you to buy discount points (“with 0.9 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 May 19, and the MBA’s on May 16. Freddie’s were released on Apr. 18, and it now updates its figures only quarterly.

Forecaster Q2/22 Q3/22 Q4/22 Q1/23
Fannie Mae 5.1% 5.1%  5.1% 5.1%
Freddie Mac 4.8% 4.8%  5.0% 5.0%
MBA 5.2% 5.1%  5.0% 5.0%

Of course, given so many unknowables, the whole current crop of forecasts might 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.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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