Mortgage And Refinance Rates, June 22

Today’s mortgage and refinance rates

Average mortgage rates edged higher yesterday. Since last Wednesday, they’ve barely moved, which is a relief. However, those for conventional, 30-year, fixed-rate mortgages have remained above 6% for the last six business days.

First thing this morning, mortgage rates today looked likely to fall, perhaps appreciably. However, Federal Reserve Chair Jerome Powell is giving testimony on Capitol Hill this morning (more on that below). And his remarks are more than capable of moving markets. So things might change in the coming hours.

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 still can’t discount the possibility of mortgage rates falling back appreciably following sharp rises over the Jun. 10-13 period. Such reactions in markets are common after such exceptional volatility. And, earlier this morning, such a fall looked like a promising possibility.

But I doubt we’ll see sustained falls anytime soon. As long as inflation remains hot, there’s probably enough upward pressure on mortgage rates to stop them from dropping far for long.

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 tumbled to 3.15% from 3.28%. (Very 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 plunged to $102.10 from $111.87 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 $1,843 from $1,836 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 19 from 20 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 look likely to fall, maybe by a worthwhile amount. 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?

This morning, at 10 a.m. (ET), Federal Reserve Chair Jerome Powell will give testimony on monetary policy before the Senate Banking Committee. And, tomorrow morning, he’ll put on a repeat performance for the House Financial Services Committee.

As The Financial Times (paywall) put it overnight, his appearances come “at a watershed moment for the Federal Reserve amid heightening recession fears.”

How come a watershed? Well, Mr. Powell is probably about to have his resolve tested. A growing number of economists and CEOs are expecting the Fed’s monetary policy (the hiking of interest rates and running down of assets) to trigger a recession, complete with higher unemployment. And nobody except the Fed wants that.

The Fed itself doesn’t exactly “want” it. But it sees a recession as a price worth paying to rein in inflation.

Soft landing?

However, the Fed is about to face an array of powerful interests — from business to government to many consumers — who dread a recession. And it will come under enormous pressure to moderate its monetary policy changes to achieve a “soft landing,” which would be low inflation while avoiding a recession.

Some argue that most current inflation is a result of disrupted supply chains owing to the pandemic and Russia’s war in China. And they say it has little to do with monetary policy, so changing that policy won’t reduce the inflation rate much. That was pretty much the Fed’s own argument up until the end of 2021. And Mr. Powell himself acknowledged it in a limited way at a news conference last week:

What’s becoming more clear is that many factors that we don’t control are going to play a very significant role in deciding whether that [a soft landing] is possible or not.

Jerome Powell, Federal Reserve news conference, Jun. 15, 2022

So, the Fed itself is still hoping for a soft landing. But many think that its achieving of one is more a question of luck than judgment.

What this means for mortgage rates

Markets always listen carefully when a Fed chair speaks. But, today and tomorrow, they’ll be listening especially attentively.

Will he drop any hints about possible compromises over rate hikes and asset disposal if a serious recession looms? Or will he stick to his gung-ho, whatever-it-takes stance?

Hints about compromising might cause mortgage rates to drop, hopes for which may have been behind this morning’s early falls. But doubling down on the current Fed line could keep them high or push them higher.

What will Mr. Powell say? We’ll just have to wait and see. But I suspect he’ll stick to his guns.

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 16 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.78% (with 0.9 fees and points), up from the previous week’s 5.23%. That will have missed a sharp and moderate rise earlier that week, as well as Wednesday’s fall.

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 Jun. 16, 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%	5.0%	5.0%	5.0%
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.