Mortgage And Refinance Rates, March 22

Today’s mortgage and refinance rates

Average mortgage rates rose unusually sharply yesterday. And they’re now at their highest in more than three years. If they carry on climbing at this pace, they’ll soon be at their highest level in 11 years.

This morning, markets are suggesting that mortgage rates today might rise again. But they probably won’t climb as quickly as yesterday. And, amid the current turbulence, nobody can be sure where they’ll be this evening.

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 have been rising unusually sharply since last August, with only occasional dips and plateaus. And it’s hard to imagine why they’d fall back in a sustained and worthwhile way anytime soon.

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 climbed to 2.37% from 2.23%. (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 climbed to $111.65 from $109.64 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices decreased to $1,923 from $1,927 an ounce. (Neutral 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 – edged up to 42 from 40 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 might 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 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 will happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

I knew that Federal Reserve Chair Jerome Powell was due to give a speech and Q&A session yesterday. But I didn’t bother telling you about it. I figured the man had hosted a news conference only last Wednesday. How much could have changed in five days?

Well, not that much in terms of substance. But Mr. Powell’s tone was even more hawkish than at the presser. In other words, he ramped up the rhetoric about how aggressive the Fed was prepared to be in tackling inflation.

For example, when asked about future federal funds rate hikes (the ones that push up interest payments on your variable rate borrowing: credit cards, auto loans and so on) of 0.5%, he said: “If we think it’s appropriate to raise [by that much] at a meeting or meetings, we will do so.”

To you and me, that sounds fair enough. But investors who’d previously thought of those jumbo hikes (most are 0.25%) as an occasional possibility now saw them as a frequent likelihood.

And all Mr. Powell’s remarks made it more starkly plain than ever that the Fed wasn’t going to pull its punches over inflation. That’s why mortgage rates moved so dizzyingly sharply yesterday.

As I’ve said before, I’m hoping that mortgage rates will soon begin to rise more moderately. And that’s still on the cards. But we may first have to wait for bond markets to digest and further price in the Fed’s likely counter–inflationary measures.

“Inverted yield curve”

Some are now expecting the yield curve to invert. That market jargon just means that yields on short–term (two–year) Treasury bonds will be higher than those on long–term (10–year) ones.

Obviously, you’d generally expect to get a higher return the longer you’re committed to an investment. So, this will be unusual, if it happens.

So what? Well, Market Insider yesterday cited a Bank of America paper published last Friday: “The bank said eight of the last 10 and 10 of the last 13 recessions have been preceded by the 10–year rate falling below the 2–year rate.” On average, those recessions have turned up between five and 24 months after an inversion.

There’s not much you can do about that. A recession might shake things up and drag mortgage rates lower. But you’ll likely have closed on your purchase months or years before that happens, assuming it does. And, for most readers, this presents only a distant hope of a refinancing opportunity some point down the line.

Still, you might prefer to know what people are talking about when they mention inverted yield curves.

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.

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

Freddie’s March 17 report puts that weekly average for 30–year, fixed–rate mortgages at 4.16% (with 0.8 fees and points), up from the previous week’s 3.85%.

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 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 March 17 and the MBA’s on Feb. 25. But Freddie now publishes these forecasts every quarter, most recently on Jan. 21. So its figures are already looking very stale.

Forecaster	Q1/22	Q2/22	Q3/22	Q4/22
Fannie Mae	3.7%	3.8%	3.8%	3.9%
Freddie Mac	3.5%	3.6%	3.7%	3.7%
MBA	3.8%	4.0%	4.1%	4.3%

Note that the MBA’s figures were issued before Russia invaded Ukraine. Of course, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.

But I still don’t understand why Fannie remains convinced that mortgage rates will rise only modestly. Just for it to be correct about the current quarter, which has only a short time left to run, those rates would have to plunge to extraordinary lows. And I just don’t see its grounds for expecting that.

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.