Mortgage And Refinance Rates, June 30

Today’s mortgage and refinance rates

Average mortgage rates fell moderately yesterday. But the drop was roughly a quarter of the overall rise over the previous three business days. So, it was welcome rather than transformative.

So far this morning, mortgage rates today look likely to fall again. That’s largely on the back of this morning’s inflation, income and spending data for May, which were better than feared. Note that markets sometimes change their minds about such figures once they’ve had a chance to fully digest them.

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.

Most of the recent ups and downs in mortgage rates have been a result of volatility. That’s markets reacting or overreacting to economic data — and to rumors and mood swings that have little basis in the real world. Strip that noise away, and it looks to me as if rates are continuing to rise.

And I suspect they’ll continue to do so for as long as inflation runs hot. However, I hope that the rate of increase might slow. And you should be aware that some commentators disagree with my analysis.

Still, 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 yesterday, were:

• The yield on 10-year Treasury notes tumbled to 3.02% from 3.17%. (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 fell to $108.14 from $112.84 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices edged down to $1,818 from $1,826 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 — fell back to 22 from 26 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. 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?

The importance of this morning’s personal consumption expenditures (PCE) inflation data can’t be overstated. Inflation is central to mortgage rates’ fate.

That data turned out to be better than expected, at least in some key respects. And that would normally lower mortgage rates, as is happening in markets now. However, be aware of two things:

1. Sometimes, markets take a while to digest new data. And they may change their minds — and directions of travel — later
2. Investors are playing complicated games at the moment, trying to anticipate how different forces will react to different stimuli. Think playing pool so strategically that you’re planning several shots ahead. And that means they sometimes react counterintuitively to new data

So, surprises are currently markets’ stock-in-trade.

Inflation, inflation, inflation

Inflation itself plays an important role in where mortgage rates go. But, right now, it’s even more crucial than usual. Because the Federal Reserve has made its central policy taming it.

At a conference of central bankers in Portugal yesterday, Fed Chair Jerome Powell said, “There’s a clock running here. The risk is that because of the multiplicity of shocks, you start to transition into a higher-inflation regime.” Mr. Powell continued, “Our job is literally to prevent that from happening. And we will prevent that from happening.”

This morning’s report is the Fed’s preferred measure of inflation. So it could play a big part in the decision-making process at the Fed’s next monetary policy meeting on July 26 and 27. Rates could move higher more or less sharply based on that report’s data.

However, economists are increasingly concerned that overly aggressive action by the Fed might trigger a recession. The central bank doesn’t want that. But, at that same conference yesterday, Mr. Powell acknowledged the possibility:

Is there a risk we would go too far? Certainly there’s a risk. The bigger mistake to make … would be to fail to restore price stability.

Jerome Powell, Federal Reserve Chair, June 29, 2022

Recessions and mortgage rates

Recessions are usually good news for mortgage rates. They tend to drag those rates lower.

However, that doesn’t necessarily apply when the Fed is actively hiking its rates. Indeed, mortgage rates reached their all-time high of 18.45% mid-recession in October 1982. And that was another time the Fed was tackling inflation.

So, don’t bank on an economic downturn to push mortgage rates lower.

Read the weekend edition of this daily article for more background.

Recent trends — 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.

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 30 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.70% (with 0.9 fees and points), down from the previous week’s 5.81%.

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.