Mortgage and refinance rates today, July 6, 2021

Today’s mortgage and refinance rates

Average mortgage rates edged lower again last Friday, which was a good way to enter the long weekend. But, overall, they’re slowly drifting back down — after those sharp rises in mid-June — to the narrow range they’ve occupied for months now.

Judging from early movements in key markets, mortgage rates today might move lower. But, as always, events in the coming hours might undermine that prediction.

Current mortgage and refinance rates

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?

Last week was a relatively good one for mortgage rates. And today may be set to continue the downward movements. So, you might wish to continue to float your rate today.

However, the risks of continuing to do so for long remain relatively high. Because most experts expect mortgage rates to rise quite 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.

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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 last Friday, were:

• The yield on 10-year Treasury notes fell to 1.39% from 1.45%. (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 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 edged down to $74.33 from $74.87 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 $1,807 from $1,785 an ounce. (Good 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 — Edged lower to 43 from 46 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 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:

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

Over recent months, I may have given the impression that I believe higher mortgage rates are an inevitability. But, of course, they aren’t. Yes, they’re still very likely. But nothing’s certain.

And, today, we’ve seen evidence from Europe that the global recovery may be less certain than many assume. That doesn’t necessarily mean that the US recovery will falter. But our economy is closely interconnected with foreign ones. And we may struggle to achieve our high projected growth figures if others can’t buy our goods and services.

German issues

This morning, the German government’s Federal Statistics Office issued its latest figures for manufacturing orders. And they fell by 3.7% in May. Most economists had forecast a rise of 1% or more.

So what caused that disappointing number? Well, there are probably several factors, including dwindling demand for heavy machinery and lower overseas orders. And even widely admired German car manufacturers are having problems with their supply chains.

Britain embraces the coronavirus

Meanwhile, also this morning, the UK government’s health secretary agreed that it would be entering “uncharted territory” if it follows through on plans to completely (well, almost) normalize life from July 19. In a radio interview, Sajid Javid said the UK’s daily infection rate might top 100,000 later in the year as a result of lifting restrictions.

The UK’s government is gambling that its high vaccination rate will limit hospitalizations and deaths. Sixty-eight percent of its population had received at least one vaccine dose by July 4, according to Our World in Data.

Of course, Britain retains the right to reimpose infection-prevention measures. But critics worry that lifting almost all restrictions might be more troublesome than Secretary Javid thinks. And that includes the risk of the UK becoming a petri dish for new variants.

What this means for mortgage rates

None of this means that the US economic recovery won’t continue unabated. But investors look at risks such as these (and countless others) with caution. And that may partly explain why mortgage rates remain low.

Still, overall, high growth in the US during 2021 still looks likely. And that’s almost certain to mean higher mortgage rates sometime soon. Unless things go horribly wrong ...

Mortgage rates and inflation: Why are rates going up?

For more background, read Saturday’s weekend edition of 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, though those moderated during the second half of that month. Meanwhile, May saw falls very slightly outweighing rises. Freddie’s July 1 report puts that weekly average at 2.98% (with 0.6 fees and points), down from the previous week’s 3.02%.

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.