Today’s mortgage and refinance rates
Average mortgage rates just inched lower yesterday. The fall was welcome, despite being tiny, after six business days of rises.
Unfortunately, the good news may not last. And it was looking earlier this morning as if mortgage rates today might rise. But nobody can ever be sure they won’t change direction as the day progresses.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||3.545%||3.566%||+0.05%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.797%||2.833%||+0.01%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||3.308%||3.345%||+0.08%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||2.796%||2.865%||+0.01%|
|30 year fixed FHA|
|30 year fixed FHA||3.568%||4.339%||+0.04%|
|15 year fixed FHA|
|15 year fixed FHA||2.725%||3.373%||+0.02%|
|5/1 ARM FHA|
|5/1 ARM FHA||2.594%||3.332%||+0.04%|
|30 year fixed VA|
|30 year fixed VA||3.252%||3.445%||+0.01%|
|15 year fixed VA|
|15 year fixed VA||3.062%||3.411%||+0.06%|
|5/1 ARM VA|
|5/1 ARM VA||2.606%||2.631%||-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.|
Should you lock a mortgage rate today?
Locking soon seems a good idea to me at the moment. Bond yields have been rising and that’s never good for mortgage rates.
Yes, they fell slightly yesterday. But that was in response to a hawkish document from the Federal Reserve. And I’m not expecting its impact to last long. More details are below.
Of course, nothing’s certain. But, 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
- LOCK if closing in 45 days
- LOCK if closing in 60 days
>Related: 7 Tips to get the best refinance rate
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 jumped to 1.72% from 1.65%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were mixed soon after opening. (Neutral 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. But this is an imperfect relationship
- Oil prices climbed to $79.96 from $78.15 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices fell to $1,793 from $1,829 ounce. (Bad 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 — fell to 53 from 66 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 are likely to rise. However, 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.
A lot is going on at the moment. 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?
The Federal Reserve released the minutes of the last meeting of its monetary policy committee yesterday afternoon. And many investors were surprised by how aggressive its anti-inflation plans were.
It’s perfectly possible — maybe likely — that the Fed will hike its interest rates as soon as March, which is earlier than expected. One headline in this morning’s Financial Times put it, “Fed warns faster rate rises may be needed to tame soaring inflation.”
Although any Fed rate rise will probably be tiny, it will have an immediate effect on almost all variable-rate borrowing, including credit cards, adjustable-rate mortgages (that are beyond their initial, fixed-rate period) and most personal and auto loans. A March hike could be the first of perhaps three during 2022.
It’s also likely that the Fed will fully withdraw its support for artificially low mortgage rates in March. And, later in the year, perhaps begin to put that program into reverse. How? By selling rather than buying mortgage-backed securities, the type of bond that largely determines mortgage rates.
Yes, markets responded with shock yesterday, pulling mortgage rates a hint lower. But, over time, the Fed’s policies are likely to push them appreciably higher.
Read Monday’s edition of this daily report to explore markets’ newfound optimism over the COVID-19 pandemic.
But, briefly, some scientists believe the new Omicron variant may blow through populations in a matter of weeks, leaving a large proportion of people with a reasonable level of immunity to future infections.
In the rosiest scenario, we achieve herd immunity, meaning the pandemic turns endemic, much like seasonal flu. And the numbers of serious cases, hospitalization and deaths resulting from COVID-19 fall to “acceptable” levels — again as is the case with flu most years.
Not all scientists buy that scenario yet. But it is possible.
And investors seem to be embracing it unless and until it’s overtaken by events. That explains why mortgage rates have generally been rising over the last week, despite continuing bad news about the current effects of Omicron.
Recently — Updated today
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.
Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.
Freddie’s Jan. 6 report puts that weekly average for 30-year, fixed-rate mortgages at 3.22% (with 0.7 fees and points), up from the previous week’s 3.11%.
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, current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Dec. 20 and the MBA’s on Dec. 21.
Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until January. And its figures are already looking stale.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
Find your lowest rate today
You should comparison shop 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.