Today’s mortgage and refinance rates
Average mortgage rates held steady yesterday. They’re still higher than they were at the start of the month. But recent falls have taken the edge off. And they’re extraordinarily low by all but the most exceptional standards.
So far this morning, it’s looking as if mortgage rates today might again be unchanged or barely changed. But there’s a danger point at 2 p.m. (ET) when the Federal Reserve releases an eagerly anticipated document. More on that below.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||2.749%||2.749%||-0.02%|
|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%||-0.11%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||1.851%||1.885%||Unchanged|
|30 year fixed FHA|
|30 year fixed FHA||2.688%||3.343%||Unchanged|
|15 year fixed FHA|
|15 year fixed FHA||2.381%||2.981%||Unchanged|
|5/1 ARM FHA|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 year fixed VA|
|30 year fixed VA||2.25%||2.421%||Unchanged|
|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?
Of course, you won’t want to lock while mortgage rates are falling. But you might want to think about doing so when they begin to rise.
Because few experts think those rates are likely to fall much further. And most expect them to rise. So your likely rewards from continuing to float are small. But your risks of doing are great.
Still, for now, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK 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 yesterday, were:
- The yield on 10-year Treasury notes nudged up to 1.27% from 1.25%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- 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 rose to $66.78 from $67.51 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 $1,788 from $1,793 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 — tumbled to 31 from 37 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 hold steady or just inch either side of the neutral line. 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
The big event today is likely to be the release at 2 p.m. (ET) of the minutes of the last meeting of the Federal Open Market Committee (FOMC). That’s the Federal Reserve’s monetary policy body.
Investors and analysts always pore over these minutes, hoping to glean insights into the Fed’s thinking. But today’s publication could cause more excitement than usual.
Because the insights it might contain this time concern “tapering,” which is the process of slowing and stopping the Fed’s current asset purchase program. Right now, it’s buying bonds at a rate of $120 billion a month.
What’s that got to do with mortgage rates?
As regular readers know, $40 billion of that $120 billion is being spent on mortgage-backed securities (MBSs), a type of bond that largely determines mortgage rates. And purchasing in those quantities is keeping those rates artificially low.
Nobody thinks today’s minutes are likely to reveal the Fed’s tapering master plan. And it’s growing increasingly clear that the central bank will start its tapering sometime this year, perhaps next month or even this. So expectations are already within a limited range.
But markets are hungry for any information that gives them a better idea of a likely date. And, if this afternoon’s release provides that, they may react, perhaps with higher mortgage rates. If it doesn’t, the minutes might be a damp squib.
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 have been mostly replaced by falls since April, though typically small ones. Freddie’s Aug. 12 report puts that weekly average at 2.87% (with 0.7 fees and points), up from the previous week’s 2.77%.
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.