Mortgage And Refinance Rates, June 13

Today’s mortgage and refinance rates

Average mortgage rates soared last Friday, setting new 13-year highs. It really was a rare and dramatically terrible day. And those rates are now perilously close to touching 6%.

So far this morning, it’s looking as if mortgage rates today might rise sharply again. As always, it’s possible that things could turn around later. But the early momentum was looking 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.

Mortgage rates often moderate after the sort of exceptional rise we saw last Friday. However, that doesn’t look to be the case today. This Wednesday afternoon we’ll learn more about the Federal Reserve’s evolving plans to tackle inflation. Markets may well spend today and tomorrow jostling for position ahead of that Fed event.

My advice is to cut your losses. True, that Fed event on Wednesday could send mortgage rates falling. Read on for more analysis of that. But, I suspect it’s more likely to keep them close to their current high or send them even higher.

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 soared to 3.28% from 3.11%. (Very 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 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 fell to $119.11 from $121.27 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices rose to $1,835 from $1,832 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 — fell to 22 from 29 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.

Don’t be fooled by all those “good for mortgage rates.” Yields on mortgage-backed securities and 10-year Treasury notes are the important things now. And those were both climbing sharply earlier this morning.

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, perhaps sharply. 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?

Last Friday’s rise in mortgage rates was startling. Mortgage News Daily (MND) reckons it sent the average for a conventional, 30-year, fixed-rate mortgage up to 5.85% from 5.55%. And such single-day jumps are, thankfully, exceedingly rare.

Friday may have been exceptional, but it came after months of rises. Indeed, MND dubbed 2022 “the worst year for mortgage rates since 1979.” And we’re less than six months in.

Often, those rates fall back to a limited extent after such a sharp movement. But there’s little sign of that today, which may not bode well for tomorrow. After that, the Fed will, on Wednesday, issue a statement and projections (2 p.m. (ET)) and host a news conference (2:30 p.m. (ET)).

Pretty much all last Friday’s rise was down to that morning’s highly disappointing inflation data. And, in particular, markets were guessing how the Fed will react on Wednesday to those new numbers. It might hike its key rate more or more often than planned. And it could accelerate its plans to reduce its holdings of mortgage-backed securities. Either of those would put extra upward pressure on mortgage rates.

What’s next?

Did markets correctly gauge the Fed’s take on that inflation data last Friday? If they think they did, mortgage rates might stay roughly the same today and tomorrow. If they believe they overreacted, those rates might fall somewhat. And, if they think they underdid their reaction, rates might rise. The last of those seems to be happening this morning.

They and we will discover on Wednesday afternoon whether markets got their gauging correct. So, again, mortgage rates might move that day and after:

• Higher if the Fed tackles inflation more aggressively than now anticipated
• Lower if its plans are less aggressive than expected
• The same if markets anticipated the plans correctly

Of course, nobody yet knows what the Fed will say on Wednesday, not even the Fed itself. Its top brass will be meeting tomorrow and Wednesday morning to decide.

But its recent rhetoric suggests it will go to any lengths to counter inflation. And that might be bad news for mortgage rates.

Let’s hope it’s all hat and no cattle. But I wouldn’t bet my next mortgage rate on it.

Read the weekend edition of this daily article 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.

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, although May was a kinder month.

Freddie’s June 9 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.23% (with 0.9 fees and points), up from the previous week’s 5.09%.

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. But it now updates its figures only quarterly so they’re already looking stale.

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. Recent events certainly make them look that way.

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.