Today’s mortgage and refinance rates
Average mortgage rates inched lower last Friday. So these rates are now back down to their lowest level in several months. And are tantalizingly close to the all-time low.
First thing, it was looking as if mortgage rates might hold steady or fall modestly today. CNBC puts that down to “investor attention focused on the Federal Reserve two-day monetary policy meeting this week” (more on that below). But markets are fickle at the moment. So there’s no guarantee that movements early in the day will continue through the coming hours.
Current mortgage and refinance rates
|Conventional 30 year fixed||2.701%||2.701%||-0.01%|
|Conventional 15 year fixed||1.99%||1.99%||Unchanged|
|Conventional 20 year fixed||2.375%||2.375%||Unchanged|
|Conventional 10 year fixed||1.851%||1.883%||Unchanged|
|30 year fixed FHA||2.594%||3.246%||-0.04%|
|15 year fixed FHA||2.4%||3%||+0.12%|
|5/1 ARM FHA||2.5%||3.207%||-0.01%|
|30 year fixed VA||2.25%||2.421%||Unchanged|
|15 year fixed VA||2.125%||2.445%||Unchanged|
|5/1 ARM VA||2.5%||2.386%||-0.01%|
|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.|
COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.
Should you lock a mortgage rate today?
So average mortgage rates are currently very close to the all-time low, according to Freddie Mac’s weekly data. Indeed, they’re a little lower than they were seven days after that record was set. But what should you do with that information?
Well, personally, I’d lock on the first day when a further fall looks unlikely, knowing I was getting an excellent deal by historical and every other standard. Yes, I’d risk missing out on some gains if those rates were to plunge even lower. But it’s far from certain that they will. And, even if they do, they might not fall far enough to justify the gamble of continuing to float.
Of course, you may legitimately take the opposite view. But 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
However, I don’t claim perfect foresight. And your personal analysis could turn out to be as good as mine — or better. So you might choose to be guided by your instincts and your personal tolerance for risk.
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 fell to 1.28% from 1.30%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
- Major stock indexes were a little lower shortly 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
- Oil prices edged up to $71.96 from $71.73 a barrel. (Neutral for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices inched higher to $1,803 from $1,797 an ounce. (Neutral for mortgage rates*.) In general, it’s 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 — held steady at 31 out of 100. (Neutral 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, so far mortgage rates today look likely to hold steady or inch lower. But 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. And a recent regulatory change has narrowed a gap that previously existed
So there’s a lot going on here. 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?
Today and soon
Mortgage rates have fallen by a worthwhile amount over the last eight business days. True, there was a modest rise on one of those days, and only small falls on some others. But there were also three hefty drops. And those made a big difference.
Most think those falls were a result of markets suddenly noticing the emerging threat to the economic recovery from the Delta variant of COVID-19. Others doubt that. But such a threat certainly exists.
However, it’s yet to wreak the sort of economic damage that would normally justify such sharp falls in several markets. Indeed, economic data have generally been positive recently. Even last week’s Leading Economic Index (LEI) from The Conference Board, which measures indicators of future economic performance, jumped 0.7%. And Comerica Bank pointed out that, “Eight of the 10 LEI components rose for the month.”
Still, none of that stopped mortgage rates from continuing lower. And it’s quite likely they’ll continue to fall, at least briefly. But, once investors get over their herd-mentality panic, they could rise quite sharply.
Might Wednesday trigger rising mortgage rates?
The Fed’s key policy body, the Federal Open Market Committee (FOMC) meets tomorrow and Wednesday. And there’s almost bound to be a lively debate over when it should start to “taper” (gradually reduce) its asset purchases.
The pressure to reduce its purchases of mortgage-backed securities (MBSs), currently running at $40 billion a month, is especially strong. Commentators are worried that the artificially low mortgage rates these purchases produce are fueling an already overheated property market.
Chances are, the Fed won’t announce an immediate tapering when it releases a statement at 2 p.m. (ET) on Wednesday, nor at its news conference 30 minutes later. But it’s not impossible. And even its signaling of a likely taper soon could immediately push up these rates.
Of course, the FOMC may tiptoe through this minefield. And mortgage rates may be unaffected. But you should be aware of the possibility of a sudden and sharp rise. And you might want to monitor financial news reports at the relevant times. If the news is big, you may choose to lock your mortgage rate right away.
For more background, read Saturday’s weekend edition of this column.
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 last year, according to Freddie Mac.
The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But then the trend reversed and rates rose.
However, those rises were mostly replaced by falls in April and since, though typically small ones. Freddie’s July 22 report puts that weekly average at 2.78% (with 0.7 fees and points), down from the previous week’s 2.88%.
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 rates forecasts for the remaining quarters of 2021 (Q3/21 and Q4/21) and the first two quarters of 2022 (Q1/22 and Q2/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on July 19, Freddie’s on July 15 and the MBA’s on July 21.
However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.
All these forecasts expect higher mortgage rates soon. But the differences between each other are stark. And it may be that Fannie isn’t building in the Federal Reserve’s tapering of its support for mortgage rates while Freddie and the MBA are.
Find your lowest rate today
Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.
But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.
But, of course, you should be comparison shopping 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.