Today’s mortgage and refinance rates
Average mortgage rates moved higher yesterday. But the rise was bigger than looked likely first thing. And they’re now well within the narrow range that’s been their home for months.
First thing, it was looking as if mortgage rates today might be unchanged or barely changed. But that could well change this afternoon. Keep reading for why.
Current mortgage and refinance rates
|Conventional 30 year fixed||2.915%||2.915%||+0.04%|
|Conventional 15 year fixed||2.245%||2.245%||+0.01%|
|Conventional 20 year fixed||2.75%||2.75%||Unchanged|
|Conventional 10 year fixed||1.944%||1.989%||+0.01%|
|Conventional 5 year ARM||3.458%||3.165%||-0.09%|
|30 year fixed FHA||2.725%||3.38%||Unchanged|
|15 year fixed FHA||2.49%||3.091%||+0.04%|
|5 year ARM FHA||2.5%||3.194%||Unchanged|
|30 year fixed VA||2.375%||2.547%||Unchanged|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|5 year ARM VA||2.5%||2.372%||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.|
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?
Today is a risky one for those who are still floating their mortgage rates. Because, at 2 p.m. (ET), the Fed will issue a report following a two-day meeting of its key policy committee. And, 30 minutes later, it will host a news conference.
What impact, if any, those have on mortgage rates will depend on what each says. But there’s an outside chance they could send mortgage rates significantly higher. More details below.
Meanwhile, I still believe the potential rewards of floating don’t justify the inherent risks. 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 inched back down to 1.49% from 1.50%. (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 mostly a little lower on 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 increased to $72.28 from $71.76 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices fell to $1,859 from $1,863 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 — dropped to 48 from 52 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, so far mortgage rates today look likely to hold steady or just inch either side of the neutral line. But that might change this afternoon. And 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
This morning’s Financial Times carried a headline (paywall), “Watch the ‘dot plot’ at the Fed meeting today.” That meeting is the one we discussed yesterday: that of the Federal Open Market Committee or FOMC, which is the Fed’s key policy body. And the “dot plot” is jargon for the graph that will appear in a report due out at 2 p.m. (ET) that shows the Fed’s latest interest rate forecasts. That report will be followed by a news conference 30 minutes later.
The Financial Times continued, “Forecasts for US interest rates could be taken as a sign of inflation concerns or complacency.” And that neatly sums up the Fed’s dilemma.
If it keeps shrugging off continuing signs of inflation (of which yesterday’s producer price index was only the latest), it risks being seen as complacent in the face of a real threat.
But, if it acknowledges the obvious threat, it can hardly continue to ignore it. However, any hints of changes in policy now — after it’s consistently promised that it wouldn’t budge — might set off a strong reaction in markets.
Higher mortgage rates a real possibility
And, were those changes in policy to include a signal that it would eventually slow (“taper”) its purchases of mortgage-backed securities (currently running at $40 billion a month), that could trigger a sharp and continuing rise in mortgage rates.
Because the last time the Fed said it might taper those purchases, in 2013, those rates jumped to 4.07% in May compared with 3.54% in April, according to Freddie Mac’s archives. And they closed the year at 4.46%.
But note that wasn’t in response to actual tapering. It was in anticipation of it. As Reuters reported, the program itself didn’t change until the end of 2013. What triggered the rise in mortgage rates was when “then-Fed chief Ben Bernanke triggered what is commonly called the ‘taper tantrum’ when he tipped their intentions during an appearance before Congress in May 2013.”
Of course, the Fed will have learned lessons from that. And it is skilled at keeping markets calm. Indeed, it may this afternoon find a way to show due appreciation of inflationary pressures while neither changing policy nor appearing complacent.
But the tightrope it’s set to walk this afternoon is fishing-line thin. And, if you’re still floating your mortgage rate, you’d be right to be on tenterhooks.
For more background, read Saturday’s weekend edition of this column, which has more space for in-depth analysis.
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 10 report puts that weekly average at 2.96% (with 0.7 fees and points), down from the previous week’s 2.99%.
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.