Mortgage And Refinance Rates, June 15

Today’s mortgage and refinance rates

Average mortgage rates rose again yesterday, though less sharply than on the previous two working days. So some of the most popular ones remain above 6% for the first time since 2008. Earlier that day, it had looked as if they might hold steady or even drift a little lower. But that changed as the hours passed.

Mortgage rates today will depend almost entirely on what the Federal Reserve says in events early this afternoon (ET). I have no idea what that will be, so I can’t predict where those rates will head. For what it’s worth, they were moving lower earlier, following disappointing retail sales figures for May.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

At last, we’ve reached the much-anticipated day on which the Fed will unveil its latest plans to counter inflation. Read on to discover why those plans, scheduled to be revealed from 2 p.m. (ET) this afternoon, could send mortgage rates higher, lower or nowhere.

In the meantime, 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 climbed to 3.40% from 3.34%. (Bad 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 decreased to $118.31 from $122.61 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 $1,829 from $1,821 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 up to 19 from 18 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. In any event, mortgage rates today are unpredictable owing to crucial events early this afternoon.

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?

Yesterday, The Wall Street Journal (paywall) summed up the last few days:

It has been an ugly spell in markets, reflecting concerns about how the economy will hold up as the Federal Reserve embarks on its sharpest campaign of interest-rate increases in decades. Investors expect an increase of 0.75 percentage point on Wednesday, which would be the largest since 1994.

WSJ, “Fed’s Stern Message Amplifies Worries About Stock Valuations,” Jun. 14, 2022

And, in an e-newsletter overnight, The Financial Times reported that the “US central bank’s move to reduce [its] $9tn balance sheet comes alongside steep rate rises to tackle persistent inflation.”

As I explained yesterday, in some ways, the running down of the Fed’s balance sheet is more important to mortgage rates than its rate hikes. That’s because almost one-third of that balance sheet ($2.7 trillion) comprises mortgage-backed securities (MBSs), the type of bond that largely determines mortgage rates.

And some investors fear the central bank might offload those too quickly, potentially flooding the market. That should drive the price of MBSs lower, which — and this is a mathematical inevitability — would increase yields and mortgage rates.

Some answers this afternoon

As I’m writing this, nobody has a clue what the Fed will say this afternoon in its statement and projections (2 p.m. (ET)) and news conference (2:30 p.m. (ET)). But markets, including the one for MBSs, are expecting some pretty bad news. That explains the recent rises in mortgage rates.

Will the Fed hike its key rate by 0.5%, as planned? Or might it be a 0.75% or even 1% rise? And will it accelerate its plans for running down its MBS holdings? Markets are expecting answers to these questions this afternoon.

What might happen to mortgage rates this afternoon

I’m going to repeat my same reading of the three possibilities for mortgage rates this afternoon and beyond, just as I’ve been doing all week. They might move:

• Higher if the Fed tackles inflation more aggressively than currently anticipated
• Lower if its plans are less aggressive than expected
• Nowhere or hardly at all if markets anticipated the plans correctly

Perhaps I should make clear that I’m talking about current market expectations here; not the plans as previously revealed by the Fed. Investors have already priced in a fairly dire scenario. The question is whether they have correctly anticipated this afternoon’s announcements.

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 Jun. 10. 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	5.1%	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.