Mortgage And Refinance Rates, Feb. 24

Today’s mortgage and refinance rates

Average mortgage rates rose appreciably yesterday. And they reached their highest point in 33 months. But, starting today, we may see some falls.

Because, so far this morning, markets have been reacting to news of Russia’s full–scale invasion of Ukraine in ways that should mean mortgage rates today fall. But, with volatility heightened, nothing’s certain.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

After sitting out the phony war, markets seem to be engaging now that Russia’s actually invading Ukraine. And we may well see lower mortgage rates today – and perhaps for a while.

But it’s very hard to even guess for how long they’ll fall. And, ultimately, the invasion is likely to push mortgage rates higher as it feeds inflation.

Because so much is unpredictable, I’m leaving my rate lock recommendations where they are. But I wouldn’t lock my rate today if I were you. And I’d wait to see how things unfold, revisiting my float–or–lock decision each morning.

So my personal rate lock recommendations 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 1.91% from 2.00%. (Very good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes plummeted. (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 climbed to $98.03 from $91.82 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices jumped to $1,937 from $1,904 an ounce. (Good for mortgage rates*.) In general, it is 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 – plunged to 13 from 35 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 change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. 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 wider 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’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

As Russian forces invaded Ukrainian territory overnight, global markets sat up and took notice. Oil prices, in particular, took the brunt, at one point spiking above $100 a barrel, a seven–year high. But stocks plunged (the Dow lost 800 points in early trading), as did the yield on 10–year US Treasury notes.

Regular readers will know that mortgage bonds (“mortgage–backed securities” or MBSs) have a close relationship with those 10–year Treasury notes. And, sure enough, this morning, those MBS yields were down, too. It’s those MBS yields that largely determine mortgage rates.

But for how long might mortgage rates move lower and stay there? I have no idea.

How long will lower mortgage rates last?

I was surprised that markets shrugged off the threat of an invasion for so long. And it may be that we’ll see lower mortgage rates for only a day or two now that the invasion is actually happening.

But you might think it more likely they’ll last well into next week and perhaps beyond. Much depends on how long the war lasts – and how bloody and economically damaging it turns out to be. Equally important will be the severity of the sanctions the international community imposes.

Ultimately, I suspect that the Ukrainian situation will lead to higher mortgage rates. Elevated oil prices, which the war is bringing, have a disproportionate effect on inflation. And inflation (and the Federal Reserve’s countermeasures against it) have been fueling recent increases in mortgage rates.

For a more detailed look at what’s happening to mortgage rates, read the latest weekend edition of this report.

Recently – Updated today

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.

Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since last September, the rises have grown more pronounced, though not consistently so. So far in 2022, rises have been appreciable and relatively consistent.

Freddie’s Feb. 24 report puts that weekly average for 30–year, fixed–rate mortgages at 3.89% (with 0.8 fees and points), down from the previous week’s 3.92%.

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 have been well over 4% that week, which is closer to the rates 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 four quarters of 2022 (Q1/22, Q2/22, Q3/22, Q4/22).

The numbers in the table below are for 30–year, fixed–rate mortgages. Fannie’s were published on Feb. 18 and Freddie’s and the MBA’s on Jan. 21.

Forecaster	Q1/22	Q2/22	Q3/22	Q4/22
Fannie Mae	3.5%	3.6%	3.7%	3.7%
Freddie Mac	3.5%	3.6%	3.7%	3.7%
MBA	3.3%	3.5%	3.7%	4.0%

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