Mortgage And Refinance Rates, June 27

Today’s mortgage and refinance rates

Average mortgage rates rose appreciably last Friday. But the increase was much smaller than falls seen earlier in the week. And the last seven days have been kind to those rates.

So far this morning, it’s looking likely that mortgage rates today will move higher again. But that could change as the day progresses.

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.

My message hasn’t changed. Most of the rises and falls in mortgage rates we’ve seen recently have been down to market volatility rather than a shift in underlying fundamentals.

Of course, nobody can see into the future with certainty. But I think rises in these rates are likely to outweigh falls for some months to come.

So, my personal rate lock recommendations for the longer term must 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 last Friday, were:

• The yield on 10-year Treasury notes rose to 3.16% from 3.10%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mixed soon after opening. (Neutral 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 rose to $106.86 from $105.40 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices inched up to $1,831 from $1,827 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 — rose to 31 from 27 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 look likely to rise. 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’s Wall Street Journal (paywall) leads with a story concerning the Bank of International Settlements (BIS). Don’t worry if you’ve never heard of it. Few have. But it’s often called “the central bank’s central bank.”

Central banks are organizations that set monetary policy and regulate banking. Ours is the Federal Reserve. Others include the European Central Bank, the Bank of Japan and the Bank of England.

Yesterday, the BIS issued its 242-page annual report. Here’s the Journal’s take on that report’s crucial content:

The world’s central banks must raise interest rates sharply, even if it significantly hurts growth, the [BIS] warned on Sunday. If they don’t, the world risks a 1970s-style inflationary spiral … Even if they do, the global economy could face a toxic combination of low or negative growth and high inflation, known as stagflation, it said.

The annual report itself also said, “Gradually raising policy rates at a pace that falls short of inflation increases means falling real [after inflation] interest rates. This is hard to reconcile with the need to keep inflation risks in check.”

Strong medicine

In other words, the BIS is suggesting that the world’s central banks are hiking their interest rates way too slowly. And, if they wish to curb inflation, they’ll have to go much further and move much faster.

It’s hard to know how seriously markets will take the report today. We’ll find out as the hours pass. But it’s certainly a bombshell message that has the potential to push mortgage rates higher.

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 23 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.81% (with 0.8 fees and points), up from the previous week’s 5.78%. But that survey won’t have captured the week’s later falls.

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 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.