Today’s mortgage and refinance rates
Average mortgage rates rose yesterday. Although we’ve seen some falls recently, those rates are significantly higher than they were in mid-September. And, overall, they’ve had a bad time over those three weeks or so. Still, by most standards, they remain exceptionally low.
So far this morning, it’s looking as if mortgage rates today may rise again on better-than-expected job figures. But markets remain volatile and nothing’s certain.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||3.131%||3.146%||+0.03%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.467%||2.496%||+0.02%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||2.959%||2.995%||+0.06%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||2.404%||2.449%||+0.04%|
|30 year fixed FHA|
|30 year fixed FHA||3.093%||3.852%||+0.05%|
|15 year fixed FHA|
|15 year fixed FHA||2.512%||3.156%||+0.01%|
|5/1 ARM FHA|
|5/1 ARM FHA||2.367%||3.061%||+0.01%|
|30 year fixed VA|
|30 year fixed VA||2.928%||3.119%||+0.05%|
|15 year fixed VA|
|15 year fixed VA||2.699%||3.049%||+0.01%|
|5/1 ARM VA|
|5/1 ARM VA||2.486%||2.307%||+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.|
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?
When you lock your mortgage rate is entirely a matter for you. But, I’d lock mine, if I were you.
Because I’m expecting those rates to climb further in the coming weeks and months. Might I be wrong? Of course. But the weight of evidence and momentum seems to be on my side.
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 inched up to 1.52% from 1.51%. (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 soon 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 fell to $77.65 from $78.64 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 higher to $1,759 from $1,755 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 index — inched down to 27 from 28 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, mortgage rates today look likely to rise. 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
Little has changed since yesterday. And investors are still anticipating Friday’s employment situation report while watching with horror as the clock ticks down to a debt ceiling crisis.
Today may see some movement because the ADP employment report was published this morning. That measures only private-sector jobs and is less comprehensive than Friday’s official report. But sometimes investors react to the ADP publication as a possible predictor of the much more important later one. If they do so today, they’ll be responding to better than expected figures.
Friday’s job numbers and mortgage rates
As explained yesterday, the Federal Reserve has signaled that it will begin to withdraw (“taper”) its support for low mortgage rates come Nov. 3 unless Friday’s job numbers are terrible. A good, mediocre or somewhat bad report will likely see it stick to that date.
For 18 months, the Fed’s been buying mortgage-backed securities (MBSs — a type of bond that largely determines mortgage rates) at a rate of $40 billion a month. That may be the single biggest reason we’ve seen uberlow mortgage rates over that period.
And, when it begins to slow those purchases — probably from Nov. 3 — it’s highly likely those rates will rise. But don’t expect investors to wait for the inevitable. Recent rises are very likely to have been a result of trading based upon the expectation of the Fed’s action. And, if Friday’s jobs report makes that almost inevitable, you might expect to see mortgage rates head higher from that day on ... and for a sustained period.
Debt ceiling catastrophe
Yesterday, Fortune magazine explored the implications of Congress failing to raise the debt ceiling in advance of Oct. 18. That’s when the United States is likely to begin to default on its debts:
Treasury Secretary Janet Yellen has said the U.S. risks “widespread economic catastrophe” if Congress fails to raise or suspend the U.S. debt limit. JPMorgan Chase CEO Jamie Dimon recently noted that a scenario in which the U.S. defaults on debt is “potentially catastrophic.”
These are not wildly exaggerated claims. If the U.S. defaults on its debts, not only would the global markets be thrown into turmoil, at home, millions would see invaluable resources dry up overnight.
Very few economists on Wall Street or in academia doubt that a failure to raise the debt ceiling would cause incalculable damage to the US and global economies. And yet legislators in Congress continue to treat it like a political football.
If the worst happens, the cost of borrowing across the board will likely rise. Of course, that won’t affect existing, fixed-rate mortgages (FRMs). But it will almost certainly push up sharply rates for new FRMs as well as those for existing adjustable-rate mortgages (ARMs) that have passed their initial fixed-rate period.
For more details, read last Saturday’s weekend edition of this series of daily articles.
Locking is a matter of probabilities
Nobody can be absolutely certain about when’s a good time to lock their mortgage rate. All anyone can do is weigh the likelihood of future events and act accordingly.
Right now, I personally reckon those probabilities are overwhelmingly in favor of locking rates now or soon. But there are no guarantees. Because it’s never impossible for some huge, unexpected disaster to disrupt everything and force rates downward.
Only you can judge how likely such an event is. But I wouldn’t hold my breath.
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. 30 report puts that weekly average for 30-year, fixed-rate mortgages at 3.01% (with 0.7 fees and points), up from the previous week’s 2.88%. Personally, I’m surprised that increase was so modest because other sources suggest a sharper one.
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.
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.
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.