Today’s mortgage and refinance rates
Average mortgage rates held steady for a second consecutive business day yesterday. They’ve been moving within a narrow range for several weeks now.
Judging from markets first thing, mortgage rates today may move lower. But things could change as the hours pass.
Current mortgage and refinance rates
|Conventional 30 year fixed||2.897%||2.897%||-0.01%|
|Conventional 15 year fixed||2.245%||2.245%||+0.04%|
|Conventional 20 year fixed||2.75%||2.75%||Unchanged|
|Conventional 10 year fixed||1.98%||2.017%||+0.03%|
|Conventional 5 year ARM||3.492%||3.177%||-0.05%|
|30 year fixed FHA||2.719%||3.375%||+0.02%|
|15 year fixed FHA||2.438%||3.038%||Unchanged|
|5 year ARM FHA||2.5%||3.194%||+0.01%|
|30 year fixed VA||2.375%||2.547%||+0.03%|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|5 year ARM VA||2.5%||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.|
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?
You won’t have come to much harm if you’ve continued to float in recent weeks. Because you’ll have gained and lost only a little as mortgage rates have fluctuated mildly each day.
But don’t bank on that lasting. Of course, it may. But it looks more likely that those rates will move higher at some point fairly soon.
And that’s why my personal rate lock recommendations 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
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 yesterday, were:
- The yield on 10-year Treasurys nudged down to 1.53% from 1.57%. (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 mixed on opening. (Neutral 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 fell to $68.55 from $69.74 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 $1,896 from $1,892 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 — rose to 51 from 49 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 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 move lower. 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. But some types of refinances are higher following a regulatory change
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
If I seemed obsessed with employment data last week, it’s because markets were. But they’re likely to switch their focus this week — back to inflation.
That’s because this Thursday sees the publication of the monthly consumer price index (CPI) and its little sister core CPI. That’s CPI with volatile food and energy prices stripped out.
Right now, the Federal Reserve is forecasting average inflation over 2021 of 2.4%. And it expects that to fall back to 2.1% by 2023. It calls the current spike “transitory.”
Questioning the Fed
But not all economists agree with that Fed forecast. In The New York Times (paywall) of June 4, Jeff Sommer spoke of “some highly qualified independent economists” who reckon “the inflation rate could exceed 4 percent and even reach 7 percent over the next few years.” And he went on to explain:
… if inflation does climb, the Fed would need to tighten financial conditions by reducing its bond purchases and by raising short-term interest rates. The markets would almost certainly become more volatile. Bonds would decline in value, because bond yields and prices move in opposite directions.
If you’re a loyal reader, you’ll have read a similar analysis here repeatedly. That’s because it’s important. The Fed is currently buying mortgage-backed securities (bonds) at a rate of $40 billion a month. And that’s keeping mortgage rates artificially low.
But when it slows asset purchases, those rates are likely to jump significantly. Certainly, that’s what happened when it took the same step back in 2013.
Those who invest in bonds probably won’t wait for the Fed to announce that it will slow its asset purchases. As soon as they believe the step has become inevitable, they’ll likely trade as if an announcement had been made.
Might Thursday’s CPI report be the trigger for higher mortgage rates? That depends on what it says. MarketWatch reports that this morning’s consensus forecast among analysts is for a 0.5% hike in both CPI and core CPI that day (May’s figures). If it’s significantly higher, we may see fireworks.
For more background, read our latest weekend edition, which has more space for in-depth analyses.
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, though those moderated during the second half of that month. Meanwhile, May saw falls very slightly outweighing rises. Freddie’s June 3 report puts that weekly average at 2.99% (with 0.6 fees and points), up from the previous week’s 2.95%.
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 (Q2/21, Q3/21, Q4/21) and the first quarter of 2022 (Q1/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on May 19 and the MBA’s on May 21. Freddie’s forecast is dated April 14. But it now updates only quarterly. So expect its numbers to begin to look stale soon.
However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.
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.