Today’s mortgage and refinance rates
Average mortgage rates held steady yesterday. Once again, they changed direction during the day.
Mortgage rates today are unpredictable. That’s less of a cop-out than it sounds. Because the Federal Reserve’s chair is beginning a key speech just as this report is being published. And what he says might cause waves in the markets that determine those rates. So watch out for news reports of the contents of that speech. And read on for more details.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||2.813%||2.813%||Unchanged|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.112%||2.112%||+0.06%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||2.49%||2.49%||Unchanged|
|Conventional 10 year fixed|
|Conventional 10 year fixed||1.906%||1.958%||+0.02%|
|30 year fixed FHA|
|30 year fixed FHA||2.689%||3.344%||Unchanged|
|15 year fixed FHA|
|15 year fixed FHA||2.437%||3.038%||+0.01%|
|5/1 ARM FHA|
|5/1 ARM FHA||2.5%||3.201%||Unchanged|
|30 year fixed VA|
|30 year fixed VA||2.322%||2.493%||+0.02%|
|15 year fixed VA|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|5/1 ARM VA|
|5/1 ARM VA||2.5%||2.379%||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?
Watch out for news about what the Fed chair says in his speech this morning. It’s perfectly possible that he’ll say nothing new and that mortgage rates will remain unchanged. But he might provide clues as to (or even reveal) the timetable for the central bank’s tapering of its asset purchasing program. More on that below.
My basic position on locking or floating your rate hasn’t changed. I reckon the risks of floating outweigh the likely benefits. And I’d lock now. But you might legitimately take the opposite view, especially if mortgage rates turn out to be unaffected by that speech this morning.
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 edged lower to 1.34% from 1.36%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were 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 rose to $68.76 from $67.30 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices inched up to $1,790 from $1,787 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 — increased to 50 from 47 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 are unpredictable. But, on most days, you need to 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
All week, I’ve been trailing Fed Chair Jerome Powell’s speech that’s due to begin at 10 a.m. (ET) this morning. That’s because it could change everything. But it might change nothing.
Regular readers will know most of what there is to know about “tapering.” The Fed is currently keeping mortgage rates artificially low by buying huge quantities of mortgage-backed securities (MBSs), a type of bond that is by far the most influential determiner of those rates.
How huge are those quantities? Well, as of Aug. 25, the Fed owned MBSs worth $2.43 trillion. Yes, that’s trillion. Heck, that’s more than Jeff Bezos earns in a whole week!
But these purchases were only ever supposed to be a temporary measure, necessary to prop up the economy during the pandemic. And the Fed’s been signaling for a while that it wants to slow and then stop (“taper”) its purchases.
The problem for the Fed is how to taper without freaking out markets. Because the last time it announced it would taper a similar program, back in 2013, investors were deeply displeased and threw something that came to be called a “taper tantrum.” And, as a result, mortgage rates shot up.
Worse, those rates shot up immediately, just on the announcement, and months before the actual tapering began.
So, understandably, the Fed’s trying a different tactic this time. It’s been working to acclimatize (or soften up) markets by slowly dripfeeding incrementally more clear information about tapering’s possible timetable. And it’s been encouraging its top officials to voice their own opinions publicly so that the final announcement will be less of a shock.
For example, yesterday, St. Louis Fed President James Bullard suggested that the Fed should move aggressively. And he wanted the whole tapering process to be over by March 2022.
The Big Speech
Much more important than the succession of personal opinions expressed by Mr. Bullard and his colleagues is anything said by Fed Chair Powell. And that’s why financial movers and shakers around the world will be paying close attention today.
Now, there’s a decent chance that Mr. Powell will say nothing new this morning. More likely, he’ll drop some more hints about the timetable. And there’s a remote possibility that he’ll unveil the whole plan.
If he says nothing new, mortgage rates may be unchanged or even fall a bit. If he unveils the timetable, they’ll likely rise. But, if he drops more hints, they could go either way. That will depend on how broad the hints are and how much they change investors’ expectations.
You can see why I’m saying that mortgage rates today are unpredictable.
For more background, read Saturday’s weekend edition of this column. And my colleague Tim Lucas’s longer-term forecast, Mortgage interest rates forecast and trends: Will rates go down in September 2021?
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. 26 report puts that weekly average at 2.87% (with 0.6 fees and points), up from the previous week’s 2.86%.
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 and the MBA’s were updated on Aug. 19. But Freddie’s were last refreshed on July 15 because it now publishes these figures only quarterly. And its forecast is already looking stale.
However, given so many unknowables, the whole 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.