Mortgage and refinance rates today, Sept. 29, 2021

Peter Warden
The Mortgage Reports editor

Today’s mortgage and refinance rates 

Average mortgage rates rose yet again yesterday. But it was a modest rise and nothing like as damaging as appeared possible first thing that morning. Small mercies.

There may be a pause in the seemingly relentless rises. Because mortgage rates today look likely to fall. But it’s too soon to do more than hope that this represents a sustained change of direction.

Find and lock a low rate (Dec 5th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 3.181% 3.195% +0.01%
Conventional 15 year fixed
Conventional 15 year fixed 2.492% 2.517% -0.02%
Conventional 20 year fixed
Conventional 20 year fixed 3.031% 3.068% +0.02%
Conventional 10 year fixed
Conventional 10 year fixed 2.5% 2.554% +0.01%
30 year fixed FHA
30 year fixed FHA 3.152% 3.913% Unchanged
15 year fixed FHA
15 year fixed FHA 2.536% 3.18% Unchanged
5/1 ARM FHA
5/1 ARM FHA 2.384% 3.062% -0.02%
30 year fixed VA
30 year fixed VA 2.977% 3.169% Unchanged
15 year fixed VA
15 year fixed VA 2.723% 3.072% +0.01%
5/1 ARM VA
5/1 ARM VA 2.494% 2.303% -0.01%
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 (Dec 5th, 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?

Mortgage rates have fallen only five times since Sept. 1 and all but one of those were tiny, according to Mortgage News Daily’s archive. But the rises over that period have been bigger and more frequent. And, as a result, average rates for 30-year, fixed-rate mortgages have risen to 3.16% from 2.92% at the start of the month.

So my suggestion is that you lock your rate soon. Of course, that doesn’t mean today if the falls that looked likely first thing materialize. But it’s far from clear that those will continue for long.

Yes, it’s possible that rates could fall back again in a sustained way. But I reckon that’s much less likely than their continuing to rise.

So 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 tumbled to 1.50% from 1.56%. (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 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 fell to $74.64 from $76.19 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
  • Gold prices edged up to $1,738 from $1,735 an ounce. (Neutral for mortgage rates*.) In general, it is 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 indexdecreased to 28 from 35 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 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 (Dec 5th, 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. 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

Yesterday, Nobel-prize-winning economist Paul Krugman explained in a New York Times e-newsletter why the possibility of the debt ceiling not being raised on time is so serious:

… the crisis could be very severe. It’s not just that the federal government would run out of money, forcing curtailment of essential services. U.S. government debt plays an essential role in the global financial system because Treasury securities are used as collateral in financial transactions around the world. During the brief Covid-induced financial panic of March 2020 interest rates on short-term Treasuries actually went negative, as frightened investors piled into the safest assets they could think of. Make U.S. debt unsafe — make the U.S. government an unreliable counterparty, because its ability to pay its bills is contingent on the whims of an irresponsible opposition party — and the disruption to world markets could be devastating.

Now, you may see professor. Krugman as partisan. He’d probably agree, although I’m guessing he’d argue that his opinions are based on his factual analyses. But what he’s saying there isn’t controversial. And you’d be hard pressed to find anyone serious in academia or on Wall Street who disagrees that the consequences of not raising the debt ceiling will lay somewhere between catastrophic and apocalyptic.

“Catastrophic”

Yesterday, Treasury Secretary Janet Yellen chose the “catastrophic” adjective. We could see a government lockdown starting this Friday. But the even more serious consequences are likely when the US begins to default on its debts. And Ms Yellen reckons that deadline’s probably Oct. 18.

For mortgage rates, such a failure to raise the ceiling is likely to cause yet more rises. Indeed, the cost of borrowing is likely to increase across the board, not just for mortgages. Of course, that won’t affect existing fixed-rate mortgages. But, if the worst happens, it almost certainly will impact new ones and existing adjustable-rate loans.

Other upward pressures on mortgage rates

Besides the debt ceiling there are two other factors that are acting to push mortgage rates higher.

The first is that the Federal Reserve continues to signal that it will, on Nov. 3, begin “tapering” (winding down) its program that’s been keeping mortgage rates artificially low. Chances are, most of the rises in these rates we’ve seen over the last couple of weeks are a result of that intention.

The second force driving mortgage rates higher is the continuing decline in the number of new COVID-19 infections we’ve been seeing recently. Investors, who have been fearful of the economic impact of the pandemic, are starting to be more optimistic about the future. And mortgage rates are almost always higher when the economy’s doing well.

You could see those two forces, plus the debt ceiling threat, as a perfect storm that is highly likely to continue to push mortgage rates higher. True, nothing’s impossible and something monumental could arise that thrusts them back down. But that’s pretty unlikely.

For more details of what’s going on, read last Saturday’s weekend edition of this daily report.

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 moderately.

However, from April, those rises were mostly replaced by falls, though typically small ones. More recently, we had a couple of months when those rates barely moved. But, unfortunately, September brought some sharp rises.

Freddie’s Sept. 23 report puts that weekly average at 2.88% (with 0.7 fees and points), up from the previous week’s 2.86%. But that doesn’t reflect the sharp rise seen on the day of publication. 

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 Sept. 20 and the MBA’s on Sept. 22. But Freddie’s were last refreshed on July 15 because it now publishes these figures only quarterly. And its forecast is looking seriously stale.

Forecaster Q3/21 Q4/21 Q1/22 Q2/22
Fannie Mae 2.9% 2.9%  3.0% 3.1%
Freddie Mac 3.3% 3.4%  3.5% 3.6%
MBA 2.8% 3.1%  3.4% 3.6%

However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.

All these forecasts expect higher mortgage rates soon or soon-ish. 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. Or perhaps Fannie believes tapering will have little impact.

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 (Dec 5th, 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.