Today’s mortgage and refinance rates
Average mortgage rates fell by a worthwhile amount yesterday, confounding my prediction. Once again, markets began the day signaling one thing and then changed their minds as the hours passed. Please remember how common this phenomenon has recently become when reading my daily forecasts.
So far this morning, it’s looking as if mortgage rates today might fall again. But that’s surprising, given the excellent jobs report published earlier. And markets might turn around later.
Current mortgage and refinance rates
|Conventional 30 year fixed||3.199%||3.215%||-0.04%|
|Conventional 15 year fixed||2.58%||2.608%||-0.02%|
|Conventional 20 year fixed||2.991%||3.025%||Unchanged|
|Conventional 10 year fixed||2.54%||2.598%||+0.02%|
|30 year fixed FHA||3.189%||3.95%||-0.02%|
|15 year fixed FHA||2.551%||3.195%||-0.01%|
|5/1 ARM FHA||2.509%||3.154%||-0.03%|
|30 year fixed VA||3.052%||3.245%||-0.01%|
|15 year fixed VA||2.741%||3.082%||Unchanged|
|5/1 ARM VA||2.553%||2.372%||-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.|
Should you lock a mortgage rate today?
I’m happy to today turn over this section to Freddie Mac Chief Economist Sam Khater, who said in a statement yesterday:
While mortgage rates fell after several weeks on the rise, we expect future upticks due to stronger economic data and as the Federal Reserve pulls back on their stimulus.
— Freddie Mac statement, Nov. 4, 2021
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 1.49% from 1.56%. (Good 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 fell to $79.62 from $82.87 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices inched up to $1,800 from $1,796 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 — rose to 85 from 83 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 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 their 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. 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?
Mortgage rates have been falling over the last couple of weeks. Indeed, those for 30-year, fixed-rate mortgages went from a six-month high on Oct. 25 to a one-month low yesterday, according to Mortgage News Daily’s archive.
And yet I’ve been urging readers to lock their rates as soon as possible throughout that time. How come?
Well, I genuinely believe that recent falls are just a pause in a strong and persistent upward trend. And I have three main reasons supporting that belief:
- The Federal Reserve has confirmed that it will begin to whittle away its support for artificially low mortgage rates starting this month
- Inflation is still running between warm and hot. And that means that investors’ fixed incomes on mortgage bonds are actually real-terms losses. Yields on those bonds largely determine mortgage rates and they need to rise to continue to attract investment
- The economic recovery can only be helped by falling numbers of new, daily COVID-19 infections in America. The numbers are beginning to plateau now. But they’ve tumbled from 285,058 on Sept. 13 to 84,688 yesterday, according to The New York Times (paywall). An improving economy almost always brings higher mortgage rates
Of course, there are other forces (most notably, supply chain issues and stubbornly low employment) trying to drag mortgage rates lower. But, in my judgment, the three pushing them higher are likely to be stronger over the coming weeks and months.
For more background, read last Saturday’s weekend edition of these daily reports.
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.
Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.
Freddie’s Nov. 4 report puts that weekly average for 30-year, fixed-rate mortgages at 3.09% (with 0.7 fees and points), down from the previous week’s 3.14%.
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, current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s and Freddie’s were published on Oct. 15 and the MBA’s on Oct. 18.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
All these forecasts expect at least modestly higher mortgage rates fairly soon.
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.
Mortgage And Refinance Rates Today, Nov. 5| Rates falling is written by Peter Warden for themortgagereports.com