Today’s mortgage and refinance rates
Average mortgage rates edged down last Friday. So they start August at their lowest point for several months. And are tantalizingly close to their all-time low.
Judging from early movements in markets, mortgage rates today look likely to fall again.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||2.686%||2.686%||Unchanged|
|Conventional 15 year fixed|
|Conventional 15 year fixed||1.99%||1.99%||Unchanged|
|Conventional 20 year fixed|
|Conventional 20 year fixed||2.375%||2.375%||Unchanged|
|Conventional 10 year fixed|
|Conventional 10 year fixed||1.851%||1.876%||Unchanged|
|30 year fixed FHA|
|30 year fixed FHA||2.563%||3.214%||Unchanged|
|15 year fixed FHA|
|15 year fixed FHA||2.331%||2.93%||+0.05%|
|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||2.008%||2.327%||-0.12%|
|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?
For the first time in many months, I’m changing my personal rate lock recommendations. I still think mortgage rates will rise, possibly soon. And that means I may have to change those recommendations again quickly. But one can only spend so much time ordering the tide to recede while neck-deep in water.
But take care if you do continue to float. Just about all mortgage experts believe higher rates are on their way. And you need to be ready to float as soon as the tide turns.
My new personal rate lock recommendations are:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- FLOAT if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT 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 last Friday, were:
- The yield on 10-year Treasury notes fell to 1.21% from 1.24%. (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 higher shortly 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 $73.10 from $73.83 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices fell to $1,812 from $1,829 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 — rose to 31 from 26 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.
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
Mortgage rates are falling. That’s been the trend since April, although there have been brief periods when they’ve risen.
But that last paragraph was the easy bit. The numbers are there for everyone to see.
What’s difficult is weighing the probabilities of different future scenarios. Ever since April, I’ve been warning of higher rates soon. But those haven’t materialized.
The trouble is, the reasons I think they’ll rise remain valid and compelling. And they’re shared by virtually all experts. Just look at the forecasts from Fannie Mae, Freddie Mac and the Mortgage Bankers Association, below. Even the most optimistic of those (Fannie’s) expects rates on 30-year, fixed-rate mortgages (FRMs) to rise to 3.0% in the current quarter. And with two months left to go, that means an appreciable increase.
But the most pessimistic of those forecasts is Freddie’s. It expects those mortgage rates to average 3.3% during the current quarter. And it says they were at 2.8% during last week. So, with one month gone already, they’d need to average more than 3.3% over the next two months in order for that to be the quarterly average.
Bears in the woods
In Saturday’s weekend edition of this column, I quoted a report from NASDAQ.com, published the previous day:
But record low real yields are often seen as a worrying sign, as they reflect a pessimistic view on future economic growth, which is why many bond bears remain undeterred because they expect a big bounceback for economic growth this year. Fifteen of the 23 banks and asset managers canvassed by Reuters said they still expect 10-year U.S. yields to end 2021 around 2%.— NASDAQ.com, "Global bonds in July notch up best month since 2020 COVID meltdown," July 30, 2021
What’s that got to do with mortgage rates? Well, yields on 10-year Treasury notes and mortgage rates have a close relationship. True, it’s not a perfect one. But those rates typically shadow those yields.
Overnight, the yield on 10-year Treasury notes was 1.24%. And it would take a jump of more than 60% to take them up to 2% by the end of this year. If mortgage rates were to jump by the same 60%, that would see them rising to almost 4.5% over the next five months.
Now, that’s just one possibility. And bankers and asset managers get things wrong all the time. But you can see why so many forecasters confidently expect higher mortgage rates soon.
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 since April, though typically small ones. Freddie’s July 29 report puts that weekly average at 2.8% (with 0.7 fees and points), up from the previous week’s 2.78%.
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 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 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.
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.