Today’s mortgage and refinance rates
Average mortgage rates nudged moderately higher yesterday. But they still remain within the lower end of the limited range within which they’ve been moving for months now.
This morning’s consumer price index was hotter than expected. Nevertheless, mortgage rates today look likely to hold steady or close to steady. However markets remain unpredictable.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||2.811%||2.811%||Unchanged|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.125%||2.125%||Unchanged|
|Conventional 20 year fixed|
|Conventional 20 year fixed||2.625%||2.625%||Unchanged|
|Conventional 10 year fixed|
|Conventional 10 year fixed||1.944%||1.984%||Unchanged|
|30 year fixed FHA|
|30 year fixed FHA||2.688%||3.343%||+0.02%|
|15 year fixed FHA|
|15 year fixed FHA||2.5%||3.101%||-0.02%|
|5/1 ARM FHA|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 year fixed VA|
|30 year fixed VA||2.295%||2.467%||+0.04%|
|15 year fixed VA|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|5/1 ARM VA|
|5/1 ARM VA||2.5%||2.392%||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?
Are we seeing the start of a movement toward higher mortgage rates? Maybe. But it’s more likely to be a limited bounce after reaching recent lows. Such bounce-backs are common. They’re not technically “market corrections” (that jargon is reserved for bigger changes) but they are markets correcting themselves after they’ve gone too far.
Whether these rates continue higher or pause or fall will likely depend on new economic data, some of which is scheduled for this week. But the consensus among experts is that they will begin to move higher soon. Unfortunately, nobody knows precisely when.
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 Treasury notes inched lower to 1.35% from 1.36%. (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 rose to $74.36 from $73.50 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices edged up to $1,812 from $1,798 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 39 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 remain unchanged or barely changed. 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
Investors seem unsure about what’s going on. Most recent economic data suggest the US economic recovery is on track to deliver a bumper year. But there are dangers — mostly COVID-19-related — that make them nervous. So they alternately appear to panic and regain confidence.
This applies to many markets, including the one in which mortgage-backed securities (MBSs) are traded. And those securities directly determine mortgage rates.
So changing investor sentiment is key to how big your monthly payment on your next home will be.
Fed still a threat to low mortgage rates
However, depending on when you must lock, actions by the Federal Reserve might prove an even greater threat to your future monthly payments than investor sentiment. That’s because the Fed is currently buying $40 billion worth of MBSs each month. And that’s keeping mortgage rates artificially low.
But, barring some economic calamity, pretty much everyone (including its own officers) recognizes that the Fed will have to gradually reduce (“taper” in Fed-speak) those purchases, probably this year. Here’s Comerica Bank’s chief economist’s take on what might happen and when. (The FOMC is the Fed’s monetary policy committee):
We expect to see a more active discussion within the FOMC about tapering asset purchases, along with more public commentary, at the upcoming FOMC meeting over July 27/28. In the upcoming commentary, we expect the Fed to confirm that they will begin to decrease the rate of asset purchase before the end of this year. Right now the window for the eventual start of tapering looks like it begins by the end of September and extends through the end of December.
If the Fed is concerned about an overheating economy and accelerating inflation, they could begin to taper by the end of September. They could use their annual Jackson Hole conference at the end of August to signal an end-of-September or October taper. If they feel less concerned about inflationary pressure, they could wait until the mid-September FOMC meeting to announce that they will begin to taper by the end of December. Much depends on how the Fed judges inflationary pressure.— Comerica Bank, "US Economic Outlook July 2021" e-newsletter received July 12, 2021
This morning’s hot consumer price index adds to the pressure the Fed is under to taper sooner rather than later.
It’s worth noting that the last time the Fed tapered asset purchases, in 2013, mortgage rates spiked on the announcement of its plans, months before the tapering actually began. Will history repeat itself this time around? We can’t be sure.
But it’s clearly a distinct possibility. And, if it does repeat itself, we could see sharply higher mortgage rates as soon as later this month or next.
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 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 (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 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.