Today’s mortgage and refinance rates
Average mortgage rates inched lower last Friday. But they closed that day a little higher than they had seven days earlier. Still, we’re having a break from the steep rate increases we’ve been seeing recently
And mortgage rates today may be unchanged or barely changed. Key markets are working out how to react to Russian President Vladimir Putin’s order yesterday that his troops invade parts of Ukraine. And the ones most likely to affect these rates still seem to be making up their minds.
Current mortgage and refinance rates
|Conventional 30 year fixed||4.118%||4.141%||-0.01%|
|Conventional 15 year fixed||3.446%||3.48%||+0.1%|
|Conventional 20 year fixed||3.989%||4.026%||+0.13%|
|Conventional 10 year fixed||3.404%||3.471%||+0.02%|
|30 year fixed FHA||4.236%||5%||Unchanged|
|15 year fixed FHA||3.715%||4.338%||Unchanged|
|30 year fixed VA||4.143%||4.352%||+0.01%|
|15 year fixed VA||3.223%||3.553%||Unchanged|
|5/1 ARM VA||4.75%||3.833%||Unchanged|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
Should you lock a mortgage rate today?
So, Russia is invading Ukraine. In theory, troops will occupy only two rebel areas. But that may well involve encounters with Ukrainian defense forces. And those could provide an excuse for the occupation of the whole country.
You might expect that nervous investors would see this as a trigger to dump risky holdings and move into safe–haven assets, including mortgage–backed securities. And that’s something that would see mortgage rates fall. But they were barely moving first thing this morning.
Even if they fall later, I suspect that those rates may begin to climb again sooner than many expect. Read on for my reasons. In the meantime, those who are still floating may benefit from continuing to do so. But I’m cautious about how much there will be to gain.
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 last Friday, were:
- The yield on 10-year Treasury notes inched up to to 1.95% from 1.94%. (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. (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 $94.03 from $89.89 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices rose to $1,907 from $1,900 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 – fell to 34 from 39 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 not move far. 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:
- 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’
- Only “top–tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
- 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
- When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
- 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?
Overnight, reports were coming in of several unmarked tanks being seen in and around the Ukrainian city of Donetsk, according to Reuters. Some think the lack of insignia suggests they’re part of Russia’s initial incursion.
Whether or not they are, we know that the Russian president has ordered an invasion (by military “peacekeepers,” according to him) of that region and neighboring Lugansk. Yesterday, he formally recognized those as sovereign republics. How delighted he must have been that these sudden, unexpected ideas happened to coincide with his amassing 190,000 troops on Ukraine’s borders.
This morning, some Wall Street investors were spooked by the news. But their actions have so far had only a limited effect on mortgage rates. The questions are: Will that change and for how long?
How long might mortgage rates fall
Western nations are keen to introduce sanctions to punish the Russian president for his bad behavior. And most of the economic damage we’ll see will probably come from those.
Yesterday, Harvard economist Jason Furman told The New York Times (paywall): “Russia is incredibly unimportant in the global economy except for oil and gas. It’s basically a big gas station.”
But, the Times reports, Russia’s fossil fuels are very important to some key economies, with the country supplying nearly 40% of Europe’s natural gas and 25% of its oil. Yet, German Chancellor Olaf Scholz this morning announced he’d halted the approval of Nord Stream 2, a gas pipeline that would have almost doubled the amount of gas Germany would buy from Russia. Unsurprisingly, oil prices have been rising since an invasion looked possible and are spiking now.
But that spike might not last long. Mr. Putin has been cozying up to China’s President Xi Jinping for months now. And Russia may be able to divert its oil and gas exports to neighboring China, which will probably feel no obligation to observe western sanctions.
Were that to happen, sanctions would ultimately have little effect on global oil supplies, which would mean that oil prices could begin to normalize quickly. Europe would just have to find alternative suppliers, presumably those that currently supply China, though that would involve some disruption.
Higher mortgage rates soon?
But, even if there’s no such deal, and oil prices remain high, that should fairly soon start to drive mortgage rates higher. Because those prices feed into inflation, something that investors in bonds, including mortgage–backed securities, hate. When investors sell bonds, that pushes prices down and yields (and mortgage rates) up.
And higher inflation might also force the Federal Reserve to act more aggressively to keep prices and salaries in check. Which is something else that should push mortgage rates higher.
So we may, perhaps, see lower mortgage rates for a while. But don’t bank on them staying that way for long.
For a more detailed look at what’s happening to mortgage rates, read the latest weekend edition of this report.
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. 17 report puts that weekly average for 30–year, fixed–rate mortgages at 3.92% (with 0.8 fees and points), up from the previous week’s 3.69%.
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.
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.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.