Today’s mortgage and refinance rates
Average mortgage rates edged higher again yesterday. But that may have been lenders catching up with rises that they failed to implement last Friday.
This morning’s inflation data were warmer than expected. And early activity in markets suggests mortgage rates today might edge lower. However, the Federal Reserve is due to release an important document at 2 p.m. (ET). And that might change things.Find and lock a low rate (Oct 17th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||3.283%||3.3%||+0.04%|
|Conventional 15 year fixed||2.585%||2.613%||+0.03%|
|Conventional 20 year fixed||3.038%||3.075%||Unchanged|
|Conventional 10 year fixed||2.516%||2.581%||Unchanged|
|30 year fixed FHA||3.231%||3.993%||+0.02%|
|15 year fixed FHA||2.568%||3.212%||+0.02%|
|5/1 ARM FHA||2.475%||3.103%||+0.03%|
|30 year fixed VA||3.095%||3.288%||+0.06%|
|15 year fixed VA||2.767%||3.116%||+0.01%|
|5/1 ARM VA||2.549%||2.33%||+0.02%|
|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?
It still seems to me that the forces trying to push up mortgage rates are much stronger than the ones trying to drag them lower. And I suspect that situation will continue into the long term.
Of course, there will be periods when those rates fall — possibly including today. That’s how markets work. But I predict that the overall trend will continue upward into the foreseeable future.
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
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 Treasury notes fell to 1.55% from 1.60%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were mostly 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
- Oil prices fell to $79.87 from $80.81 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices rose to $1,781 from $1,759 an ounce. (Good 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 — fell to 33 from 38 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, 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?
Today and soon
Yesterday, Atlanta Federal Reserve President Raphael Bostic told The Financial Times that he believed that the Fed should begin to wind down its asset purchases as soon as possible. “I think that the progress has been made,” he said. “And the sooner we get moving on that the better.”
Of course, Mr. Bostic is just one voice within the Fed. And others may disagree. But most investors seem convinced that the central bank will indeed begin to taper those purchases come Nov. 3.
And that’s crucial for mortgage rates. The Fed’s been buying mortgage-backed securities at a rate of $40 billion a month for the last 18 months. And those securities largely determine mortgage rates. So, when it begins to turn off that faucet, those rates are very likely to rise further.
We may learn more this afternoon at 2 p.m. (ET) when the Fed releases the minutes of the last meeting of its monetary policy body, the Federal Open Market Committee.
Is the economic recovery stalling?
You’ve probably seen recent reports about the headwinds the recovery is facing. And various banks, plus the International Monetary Fund (IMF), have been scaling back their forecasts for gross domestic product (GDP) growth both domestically and globally. And it’s true that stubbornly disappointing employment figures and global supply chain issues together may be slowing that growth.
Such forecasts are important to mortgage rates because those rates tend to be higher when the economy’s doing well and lower when it’s doing badly. So should we see those reports as a glimmer of hope for lower mortgage rates?
Sadly, I doubt it, at least for now. Even after they’ve been scaled back, those growth forecasts show a booming economy. Meanwhile, other forces are in play that are pushing rates higher. For example, rates of new COVID-19 infections in America have been falling for a month. And inflation is proving much more persistent than many expected.
So I’m reasonably confident in predicting higher mortgage rates as we move forward. But nothing’s impossible.
For more details about the Fed’s plans and other influences on mortgage rates, 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. But then the trend reversed and rates rose moderately.
However, from April, those rises were mostly replaced by falls, though typically small ones. More recently, we had a couple of months when those rates barely moved. But, unfortunately, September brought some sharp rises.
Freddie’s Oct. 7 report puts that weekly average for 30-year, fixed-rate mortgages at 2.99% (with 0.7 fees and points), down from the previous week’s 3.01%. But expect them to be higher tomorrow.
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 quarters of 2021 (Q3/21 and Q4/21) and the first two quarters of 2022 (Q1/22 and Q2/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Sept. 20 and the MBA’s on Sept. 22. But Freddie’s were last refreshed on July 15 because it now publishes these figures only quarterly. And its forecast is looking seriously stale.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
All these forecasts expect higher mortgage rates soon or fairly soon. But the differences between the forecasters are stark. And it may be that Fannie isn’t building in the Federal Reserve’s tapering of its support for mortgage rates while Freddie and the MBA are. Or perhaps Fannie believes tapering will have little impact.
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.