Today’s mortgage and refinance rates
Average mortgage rates inched lower yesterday. And that was enough to wipe out Friday’s equally tiny rise. But nearly all the damage wreaked last week remains intact.
Once again, we may be in line for a quiet day. Because market movements first thing suggested mortgage rates today might hold steady — or close to steady.
Current mortgage and refinance rates
|Conventional 30 year fixed||2.942%||2.942%||+0.01%|
|Conventional 15 year fixed||2.375%||2.375%||Unchanged|
|Conventional 20 year fixed||2.75%||2.75%||Unchanged|
|Conventional 10 year fixed||2.077%||2.113%||Unchanged|
|30 year fixed FHA||2.822%||3.48%||+0.02%|
|15 year fixed FHA||2.716%||3.32%||+0.03%|
|5 year ARM FHA||2.5%||3.22%||Unchanged|
|30 year fixed VA||2.383%||2.555%||+0.01%|
|15 year fixed VA||2.311%||2.633%||+0.06%|
|5 year ARM VA||2.5%||2.399%||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?
We’re seeing unusually high volatility in markets at the moment (more on that below). And that’s making short-term forecasting next to impossible. But I haven’t lost hope that we could see at least some falls in mortgage rates in the coming days.
Right now, it’s looking unlikely that they’ll be enough to compensate for last week’s rises. Or get even close to doing that. Meanwhile, the fundamentals haven’t changed. And most economists and industry insiders expect higher mortgage rates sometime soon.
So 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 edged up to 1.50% from 1.48%. (Bad 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 lower soon 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 rose to $73.46 from $72.02 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices inched up to $1,777 from $1,776 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 30 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 barely move. 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. 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
I mentioned heightened volatility earlier in this article. And that was illustrated in the trading of 10-year Treasury notes yesterday. Those are important, because mortgage rates often shadow their yields.
At one point yesterday, those Treasury yields hit their lowest point in three months: 1.35%. But, overnight, they were back up to 1.51%, up from 1.43% at roughly the same time yesterday. In other words, with very little new information, they’ve been bouncing around with near-total abandon.
Mortgage rates likely haven’t followed such an extraordinary path. Lenders take a while to respond to changes and that evens out the worst extremes. But it does make accurate short-term predictions impossible.
So, while yesterday I was suggesting there may be falls in those rates later this week, that’s now only my hope.
Further ahead, it’s much easier to forecast. Because the two main drivers of higher rates remain in place and are likely to begin to bite soon (if they haven’t started already):
- A continuing economic recovery — Mortgage rates tend to move higher when the economy is doing well
- The Fed is almost certain to have to begin to gradually reduce (“taper”) its purchases of mortgage-backed securities sometime this year. And pressure is growing on it to do so sooner than later
Overnight, CNN Business Nightcap quoted David Kelly, chief global strategist at JPMorgan Funds:
Despite home prices rising at the fastest pace on record, the Federal Reserve continues to prop up the housing market by purchasing $40 billion of mortgage bonds each month. That support for an already-booming housing market risks locking first-time home buyers out of the market, and deepening inequality as millennials get shut out (yet again) from wealth-building opportunities like homeownership.
— CNN Business, Nightcap e-newsletter, June 21, 2021
For new readers, it’s trading in mortgage-backed securities (a type of bond) that actually sets mortgage rates. And, by buying such huge quantities, the Fed is keeping mortgage rates artificially low. But, based on history, those rates are likely to shoot higher when it signals it will run down its program.
So, absent some cataclysmic event, higher mortgage rates seem highly likely in coming months.
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 17 report puts that weekly average at 2.93% (with 07 fees and points), down from the previous week’s 2.96%. But that won’t have included most of the sharp rises we saw last week.
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 June 16 and the MBA’s on June 18. Freddie’s forecast is dated April 14. But it now updates only quarterly. So its numbers are looking stale.
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.