December 4, 2021

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Mortgage and refinance rates today, July 12, 2021

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Today’s mortgage and refinance rates 

Average mortgage rates inched higher last Friday. But that was the first rise in a week. And these rates remain exceptionally low by recent and historical standards.

Judging from early movements in key markets, there’s no strong direction of travel today. And it’s looking as if mortgage rates today may hold steady or nearly steady.

Find and lock a low rate (Jul 13th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 2.811% 2.811% Unchanged
 
Conventional 15 year fixed 2.125% 2.125% Unchanged
 
Conventional 20 year fixed 2.625% 2.625% Unchanged
 
Conventional 10 year fixed 1.944% 1.983% Unchanged
 
30 year fixed FHA 2.672% 3.326% Unchanged
 
15 year fixed FHA 2.522% 3.123% +0.16%
 
5/1 ARM FHA 2.5% 3.213% +0.01%
 
30 year fixed VA 2.258% 2.429% Unchanged
 
15 year fixed VA 2.25% 2.571% Unchanged
 
5/1 ARM VA 2.5% 2.392% +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.

Find and lock a low rate (Jul 13th, 2021)


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?

Over the last two or three weeks, mortgage rates have been moving lower. And that may continue (overall, amid rises and falls), at least for another week or two.

But there’s no certainty that will be the case. And most experts still think mortgage rates will begin to rise sometime soon. Indeed, there’s a possibility of a sharp rise later this month or next. So, if you’re continuing to float, don’t be complacent. And be ready to lock immediately if the need arises.

Personally, I’m not that brave. So, my 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.

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Important notes on today’s mortgage rates

Here are some things you need to know:

  1. 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
  2. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
  3. 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
  4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
  5. 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

Yesterday, Treasury Secretary Janet Yellen, a former chair of the Federal Reserve, warned of the potential economic harm that the COVID-19 pandemic could still wreak. After a meeting of the Group of 20 (G-20) nations, Ms Yellen said:

We are very concerned about the Delta variant and other variants that could emerge and threaten recovery. We are a connected global economy. What happens in any part of the world affects all other countries.

— Quoted in The New York Times (paywall), July 11, 2021

Ms. Yellen’s comment echoes a very similar message relayed last Friday in an interview in The Financial Times by Federal Reserve Bank of San Francisco President Mary Daly.

Luckily, such remarks tend to be good for mortgage rates. Because any prospect of a slowing in the economic recovery encourages investors to switch their money from riskier stocks into safe-haven bonds, including mortgage-backed securities (MBSs), which directly determine those rates. As extra demand makes the prices of MBSs rise, they deliver lower yields and therefore lower mortgage rates.

Inflation remains a risk

Meanwhile, investors remain concerned about current and future inflation. And their worries may be confirmed or allayed later this week by several inflation-related economic reports.

The first and most important of those is due out tomorrow. And that’s the consumer price index (CPI), along with core CPI, which is the CPI with volatile food and energy prices stripped out.

Higher-than-expected figures could bring about higher mortgage rates. Because investors fear that high ones might force the Fed to slow its purchases of mortgage-backed securities sooner than previously planned. Conversely, lower-than-expected figures might push these rates lower.

It’s the Fed announcing early that it would begin “tapering” (gently reducing) its purchases of MBSs that presents the biggest risk of a sudden, sharp rise in mortgage rates.

Mortgage rates and inflation: Why are rates going up?

For more background, read Saturday’s weekend editionof this column, which has more space for in-depth analysis.

Recently

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 only small ones. Freddie’s July 8 report puts that weekly average at 2.9% (with 0.6 fees and points), down from the previous week’s 2.98%.

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.

Forecaster Q2/21 Q3/21 Q4/21 Q1/22
Fannie Mae 3.0% 3.0%  3.2% 3.2%
Freddie Mac 3.2% 3.3%  3.4% 3.5%
MBA 3.0% 3.2%  3.5% 3.7%

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.

Verify your new rate (Jul 13th, 2021)

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.

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