Mortgage and refinance rates today, July 14, 2021

Peter Warden
The Mortgage Reports editor

Today’s mortgage and refinance rates 

Average mortgage rates edged higher again yesterday. That’s three rises on consecutive business days. And they’re beginning to make a dent in last week’s falls. But those rates are still way lower than they were for much of the second half of June.

Federal Reserve Chair Jerome Powell will tell the House financial services committee later today that changes in monetary policy are still “a ways off,” according to an advance copy of his remarks. The news means mortgage rates today look likely to fall.

Find and lock a low rate (Jul 31st, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 2.826% 2.826% +0.02%
Conventional 15 year fixed
Conventional 15 year fixed 2.195% 2.195% +0.07%
Conventional 20 year fixed
Conventional 20 year fixed 2.625% 2.625% Unchanged
Conventional 10 year fixed
Conventional 10 year fixed 1.955% 2% +0.02%
30 year fixed FHA
30 year fixed FHA 2.688% 3.343% Unchanged
15 year fixed FHA
15 year fixed FHA 2.556% 3.158% +0.06%
5/1 ARM FHA
5/1 ARM FHA 2.5% 3.213% Unchanged
30 year fixed VA
30 year fixed VA 2.346% 2.518% +0.05%
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.
Find and lock a low rate (Jul 31st, 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?

I’m still not panicking (yet) over recent mortgage rate increases. Of course, it’s always possible that they’ll keep rising and turn into an upward trend. But I suspect they’ll moderate soon. So far, they’re looking like a standard bounce back from a recent low. And this morning’s news from the Fed is already triggering a likely fall in mortgage rates.

But there’s still a risk in continuing to float. Because a sharp rise within weeks is a real possibility. And gently rising mortgage rates are widely expected soon, even if that sharp rise doesn’t materialize.

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 edged up to 1.37% from 1.35%. But they closed yesterday at 1.42% so they’re now falling. (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 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 rose to $75.12 from $74.36 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 $1,826 from $1,812 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 indexinched up to 41 from 39 out of 100. (Bad 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.

Find and lock a low rate (Jul 31st, 2021)

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’s hotter-than-expected consumer price index saw the sharpest rise in those prices in 13 years. And this morning’s Financial Times has a headline: “Taper tensions: [Federal Reserve Chair] Jay Powell under pressure as US inflation surges.” Underneath, it read, “Soaring prices will embolden hawkish Fed pushing for withdrawal of monetary stimulus.”

Mr. Powell will be giving testimony on Capitol Hill from noon (ET) today. And the Fed gave a preview this morning of what he will say. He thinks any tapering is still “a ways off.” And mortgage rates fell on that news. But some may think he pretty much has to say that. Read on for reasons why he might soon be left with little choice but to taper.

Meanwhile, this morning’s producer price index, which shows inflation still in the pipeline, was also hotter than expected. The median forecast among analysts had been for a 0.6% increase in June. But the index actually jumped 1%.

All this is important for mortgage rates because it relates to the possibility of the Fed slowing (“tapering”) its purchases of assets, including mortgage-backed securities, which I explored yesterday. The last time it did that, in 2013, mortgage rates shot up.

How bad is inflation?

Clearly, many are worried about inflation and the possibility of it growing and remaining, perhaps for years. Some older economists and economic historians remember how devastating that phenomenon was back in the 1970s.

And that’s why so many loud voices are delivering dire warnings. But yesterday evening’s Nightcap e-newsletter from CNN Business added some perspective:

Definitely don’t panic. Although prolonged inflation is bad, the Fed and many economists believe these surges will be temporary (though what they mean by “temporary” isn’t always clear). We’re now correcting for the Lost Summer of 2020, in a sense — year-over-year headline numbers are going to look (and feel) dire when you’re coming out of a deep recession. Take travel: Airfares are up nearly 25% over the past 12 months, while hotel and motel prices rose 15%. But both are still below where they stood in pre-pandemic June 2019. 

CNN Business Nightcap, “EVERYTHING’S EXPENSIVE,” July 13, 2021

So far, the Fed’s resisted pressure to taper. But if enough people believe the doomsayers, the decision will be taken from its hands. And various senior Fed officers (as well as the minutes of its last policy committee meeting) suggest it’s positioning itself to begin to taper soon, probably this year.

But, in 2013, it was the announcement of tapering and not the actual reductions in asset purchases that triggered a spike in mortgage rates. And we could see such an announcement within weeks.

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 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.

Forecaster Q3/21 Q4/21 Q1/22 Q2/22
Fannie Mae 3.0% 3.2%  3.2% 3.3%
Freddie Mac 3.3% 3.4%  3.5% 3.6%
MBA 3.2% 3.5%  3.7% 3.9%

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 31st, 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.