Today’s mortgage and refinance rates
Average mortgage rates inched lower again yesterday. It was the smallest measurable fall. But it set a new recent low. And brought this morning’s rates even closer to the all–time low
Mortgage rates today look likely to fall again. Markets are focused on a meeting of the Federal Reserve’s monetary policy committee, which begins a two–day meeting today. And tomorrow afternoon (at 2 p.m. (ET) and at a news conference 30 minutes later) we can expect news of its deliberations. More on that below.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||2.778%||2.778%||+0.08%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||1.99%||1.99%||Unchanged|
|Conventional 20 year fixed|
|Conventional 20 year fixed||2.377%||2.377%||Unchanged|
|Conventional 10 year fixed|
|Conventional 10 year fixed||1.849%||1.86%||-0.02%|
|30 year fixed FHA|
|30 year fixed FHA||2.625%||3.277%||+0.03%|
|15 year fixed FHA|
|15 year fixed FHA||2.369%||2.968%||-0.03%|
|5/1 ARM FHA|
|5/1 ARM FHA||2.5%||3.207%||Unchanged|
|30 year fixed VA|
|30 year fixed VA||2.25%||2.421%||Unchanged|
|15 year fixed VA|
|15 year fixed VA||2.125%||2.445%||Unchanged|
|5/1 ARM VA|
|5/1 ARM VA||2.497%||2.385%||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?
Nothing’s changed since yesterday. Mortgage rates continue to inch down, making slow progress toward the all–time low. But there’s a chance all that could change tomorrow after the Fed statement and news conference following its key meeting. And there’s even an outside chance of significant rises starting then. Read on for more on that.
We won’t know what effect, if any, that Fed activity will have on mortgage rates until then. But you have an opportunity to lock now at an extraordinarily low rate. And, if I were you, I’d take that opportunity and swallow the risk of further falls.
But you may legitimately take the opposite view. Still, 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 1.24% from 1.28%. (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 lower shortly 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 $71.83 from $71.96 a barrel. (Neutral for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices held steady at $1,803 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 – edged down to 28 from 31 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 continue lower. But be aware that “$2ntraday 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 “$2op–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
Overnight, CNBC linked falls in yields on 10–year Treasury notes to anticipation of the meeting of the Fed’s key policy body, the Federal Open Market Committee (FOMC). That starts today and ends tomorrow. Mortgage rates normally shadow those yields because mortgage–backed securities (MBSs) compete for the same buyers with those particular notes.
In its analysis, CNBC quoted Mobeen Tahir, associate director of research at WisdomTree, who appeared on the channel’s “$2quawk Box Europe” yesterday. It reported on his view of the Fed’s recent pronouncements, which he thought were “$2volving but not evolving fast enough.” And it continued:
Tahir said this has three major implications: firstly, that inflation could be higher for longer. Secondly, he said, “volatility could be triggered by changes in monetary policy, as markets are waiting and reacting to every single announcement that the Federal Reserve makes.” Thirdly, Tahir said that if the Fed were forced to “slam the brakes” on accommodative monetary policy to control inflation, that could result in a “taper tantrum.” This happened in 2013 after Fed Chairman Ben Bernanke hinted at the tapering of asset purchases, prompting a spike in bonds yields.— CNBC, "Treasury yields fall ahead of Fed policy meeting," July 27, 2021
What this means for mortgage rates
Tahir’s warnings over volatility and a possible taper tantrum are of serious (and possibly imminent) concern to those waiting to lock their mortgage rates. Because greater volatility is at least as likely to bring higher rates as lower ones. And that 2013 tantrum sent mortgage rates shooting up.
Note CNBC’s comment that then–Fed Chair Bernanke had merely “$2inted” at the tapering of asset purchases. Because it wasn’t a full–blown announcement that triggered the 2013 taper tantrum. Then as now, markets were working with a hair trigger as they awaited more decisive guidance.
But let’s get this in perspective. Few observers expect the Fed to make the sort of announcement tomorrow that is likely to trigger a tantrum or cause extreme volatility. But it is under growing pressure to slow its purchases of MBSs, which are currently keeping mortgage rates artificially low, and are thus contributing to higher home prices. And that hair trigger is back in place.
Fed chair on a tightrope
So the Fed has to walk a tightrope. On the one hand, it must be seen to be taking inflation (including home–price inflation) seriously enough to calm market fears. On the other, it wants to avoid any pressure on that trigger by suggesting it plans to change policies over its asset purchases or its interest rates anytime soon. Because, if it does, that could generate a new taper tantrum.
Now, the Fed has become pretty expert at this particular type of tightrope walking. But it’s still a daredevil act. And accidents can happen. So tomorrow really does present a (small, we hope) risk to today’s uberlow mortgage rates.
Let’s hope the current Fed Chair Jerome Powell maintains his balance when he hosts tomorrow’s news conference at 2:30 p.m. (ET).
For more background, read Saturday’s weekend edition of this column.
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 typically small ones. Freddie’s July 22 report puts that weekly average at 2.78% (with 0.7 fees and points), down from the previous week’s 2.88%.
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 July 19, Freddie’s on July 15 and the MBA’s on July 21.
However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.
All these forecasts expect higher mortgage rates soon. But the differences between each other 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.
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.