Today’s mortgage and refinance rates
Average mortgage rates inched higher yesterday. But, since last Wednesday evening, all movements in these rates have been small or tiny.
Despite disappointing unofficial jobs figures earlier, key markets are barely moving. If that lasts through the afternoon, mortgage rates today might again barely move.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||3.835%||3.859%||+0.02%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||3.184%||3.221%||+0.04%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||3.468%||3.506%||Unchanged|
|Conventional 10 year fixed|
|Conventional 10 year fixed||3.089%||3.16%||+0.01%|
|30 year fixed FHA|
|30 year fixed FHA||3.938%||4.717%||+0.02%|
|15 year fixed FHA|
|15 year fixed FHA||3.169%||3.782%||Unchanged|
|5/1 ARM FHA|
|5/1 ARM FHA||4.25%||4.318%||+0.23%|
|30 year fixed VA|
|30 year fixed VA||3.953%||4.158%||+0.02%|
|15 year fixed VA|
|15 year fixed VA||3.352%||3.694%||Unchanged|
|5/1 ARM VA|
|5/1 ARM VA||3.731%||3.273%||+0.19%|
|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?
My view is that mortgage rates are on a gentle upward trend that’s sometimes punctuated by days or periods of falls. Overall, I think they’ll probably slowly head higher for some time to come.
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
>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 edged down to 1.77% from 1.80%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were mixed but hardly moving. (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 rose to $88.68 from $87.28 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 $1,805 from $1,804 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 — decreased to 35 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, mortgage rates today might barely move. 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?
I’ve recently been going on (and on and on) about inflation and current Federal Reserve actions. And those have indeed been the main drivers of higher mortgage rates for a while.
But, as you know, mortgage rates also tend to move higher when the economy is thriving. And the booming economy is another driver.
Booming economy? What booming economy? Yesterday, The Wall Street Journal published an article under the headline, “Consumer Pessimism Grows as Inflation Accelerates" (paywall). And it quoted a famous tracking study, the consumer sentiment index, by the University of Michigan, which shows many believe the economy’s struggling.
But those consumers are largely wrong. Don’t believe me? Read (you may have to register) the latest Comerica Bank U.S. Economic Outlook, published yesterday. Its highlights, quoted directly, include:
- Real GDP bounced back to 6.9% growth in seasonally-adjusted annualized terms in the fourth quarter of 2021
- 2022 should see shortages, delivery delays, and related inflationary pressures subside
- The unemployment rate fell like a stone in the second half of 2021, dropping 2.0 percentage points from June to December — that is six times faster than in the recovery from the 2008-09 recession!
- The economy slowed in early 2022, held back by Omicron, but growth will pick up again as the wave fades
- Real GDP growth will likely average 4.0% this year ... well above this decade’s likely trend growth rate of 1.5% to 2.0%
Yes, that’s all very well. But what about inflation? Well, Nobel-Prizewinning economist Paul Krugman addressed that, also yesterday, in a New York Times e-newsletter.
He believes the inflation we’re seeing now is very different from the sort that caused so much pain in the late 1970s. And he’s been working with that University of Michigan tracking study to gain some insights.
In particular, he looked at expectations for future inflation in 1980. " ... in February 1980, one-year expected inflation was 10 percent, five-year expected inflation 9.7 percent,” he wrote.
But things are very different now. True consumers are expecting high inflation this year. But, when asked about the next five years, their expectations are much more modest. Dr. Krugman continued:
Here’s how that works: Imagine that people expected 5 percent inflation this year, but only 2 percent after that. Then, they’d expect prices over the next five years to rise by 13 percent — (4⨉2) + 5 — with an average inflation rate over the whole period of 2.6 percent per year.
In other words, in 1980, everyone (consumers, employers, manufacturers, importers, unions, governments ...) thought inflation was baked in for years to come. And they acted accordingly, routinely hiking prices and wages.
But, now, all those mostly think high inflation will be gone soon. So nothing’s baked in. At least, yet.
Of course, if and when inflation does fade, perhaps later in 2022 or in 2023, that will relieve some of the upward pressure on mortgage rates. But they’re unlikely to fall far, if at all, because the economy should have recovered.
And, once that gets back to normal, so will mortgage rates. Of course, right now, they’re abnormally low.
For a more detailed look at what’s happening to mortgage rates, read the latest weekend edition of this report.
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 that year, according to Freddie Mac.
The most recent weekly record low occurred on Jan. 7, 2021, 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 last September, the rises have grown more pronounced, though not consistently so.
Freddie’s Jan. 27 report puts that weekly average for 30-year, fixed-rate mortgages at 3.55% (with 0.7 fees and points), barely changed from the previous week’s 3.56%. But that Thursday report won’t include the previous day’s appreciable rise. And mortgage rates actually rose over the Thursday-to-Thursday week.
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 four quarters of 2022 (Q1/22, Q2/22, Q3/22, Q4/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Jan. 19 and Freddie’s and the MBA’s on Jan. 21.
Personally, I was surprised that Fannie Mae only slightly increased its rate forecasts in January. It believes that rates for 30-year, fixed-rate mortgages will average 3.2% over the current quarter. But, on the day its figures were published, we reported those for conventional loans were already up to 3.87%.
Do Fannie’s economists expect those rates to plummet later this month or in February or March and remain lower in the following quarters? If so, they know something that I don’t. And that their peers in Freddie and the MBA’s teams don’t, either, though I’m less optimistic than any of them.
Of course, 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.