Today’s mortgage and refinance rates
Average mortgage rates rose again yesterday, the sixth increase in as many business days. They’re not only at 14-year highs. But they’re also now in the mid-6% range. And, only weeks ago, I didn’t think I’d be writing that sentence in 2022.
So far this morning, markets are suggesting mortgage rates today might rise, perhaps appreciably. Of course, that might change later in the day.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||6.404%||6.437%||+0.08%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||5.664%||5.691%||+0.1%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||6.763%||6.819%||+0.17%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||5.653%||5.77%||+0.08%|
|30 year fixed FHA|
|30 year fixed FHA||6.276%||7.053%||-0.21%|
|15 year fixed FHA|
|15 year fixed FHA||6.123%||6.595%||-0.08%|
|30 year fixed VA|
|30 year fixed VA||6.058%||6.285%||+0.04%|
|15 year fixed VA|
|15 year fixed VA||6.125%||6.483%||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.|
Should you lock a mortgage rate today?
Don't lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.
I struggle to imagine significant and sustained falls in mortgage rates for as long as the Federal Reserve is hiking its interest rates. And it says it’s going to continue doing that into 2023.
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 climbed to 3.58% from 3.50%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were falling soon after opening. (Sometimes 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. But this is an imperfect relationship
- Oil prices increased to $84.42 from $83.60 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
- Gold prices edged lower to $1,669 from $1,675 an ounce. (Neutral for mortgage rates*.) It is generally 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 — rose to 38 from 34 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 movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. 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. 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 broader 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 will happen to mortgage rates in the coming hours, days, weeks or months.
Are mortgage and refinance rates rising or falling?
According to The Wall Street Journal (paywall) this morning, yields on Treasury securities are at multiyear highs. The bonds that largely determine mortgage rates (mortgage-backed securities or MBSs) are closely related to 10-year notes. So, it’s no surprise that yields on those, too, are high: at a 14-year high.
And the Journal puts a lot of that down to Federal Reserve rate hikes. Indeed, what happens next partly depends on how big a rate hike it unveils tomorrow.
Overnight, CME’s FedWatch tool gave a 0% chance of tomorrow’s increase being less than 75 basis points (0.75%). And it assigns an 80% probability to that 0.75% rise. But it gives a 20% probability of a huge 100-basis-point (1%) rise.
Rises in mortgage rates over the last few days may have been a result of markets bracing for that larger hike. Investors anticipate Fed actions by pricing in what they think may happen ahead of actual announcements.
We’ll find out tomorrow how successfully those investors have done that. But I shouldn’t be a bit surprised if mortgage rates moved appreciably higher were the Fed to opt for a 1% hike. And, if it’s a 0.75% one, those rates may stay close to steady or even fall. But there are other considerations that might upset that prediction ...
Don’t forget the “dot plot” ...
The Fed will publish its dot plot tomorrow at 2 p.m. (ET). That’s a chart that shows where each member of the Fed’s monetary policy committee (the Federal Open Market Committee or FOMC) expects interest rates to move in the coming months.
As these committee members are the very people who decide on future rates, the dot plot will be immediately seized on by investors. Because they’re desperate to know how long the pain of higher and rising interest rates will last.
If the dot plot shows that the Fed’s federal funds rate (to which most interest rates are tied) is likely to climb much higher than its current 2.75% — 3% range and stay there for long, mortgage rates might rise tomorrow, no matter what new rate is announced. That Journal article said:
Some economists see the Fed taking the terminal rate even higher. Nomura economists are forecasting a terminal rate of 4.5% to 4.75%, up half a percentage point from their prior call. Deutsche Bank’s chief U.S. economist sees the federal funds rate going as high as 5%.
... And the news conference
Also of importance tomorrow will be Fed Chair Jerome Powell’s news conference, scheduled for 2:30 p.m. (ET). If his remarks ramp up the Fed’s aggressive stance on interest rates, that, too, could put upward pressure on mortgage rates.
As The New York Times (paywall) put the whole situation in a headline yesterday: “Wall Street Is on Edge as It Tries to Guess What the Fed Is Thinking.”
Of course, we shan’t know anything for sure until the Fed has its say. And I’ll be delighted if mortgage rates end tomorrow where they started it or a bit lower. But I shouldn’t be a bit surprised if they rise yet higher. Strap in!
Read the weekend edition of this daily article for more background.
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.
Freddie’s Sep. 15 report put that same weekly average for conventional, 30-year, fixed-rate mortgages at 6.02% (with 0.8 fees and points), up from the previous week’s 5.89%. Little of that Tuesday’s big rise is likely to be reflected in Freddie’s latest report.
Note that Freddie expects you to buy discount points (“with 0.8 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would be closer to the ones we and others quote.
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 two quarters of 2022 (Q3/22, Q4/22) and the first two quarters of next year (Q1/23, Q2/23).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s forecast appeared on Aug. 22 and the MBA’s on Aug. 23. Freddie’s came out around Jul. 21. But it now releases forecasts only quarterly. So, expect its figures to look stale soon.
Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive. Personally, I think they’re too optimistic.
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.