Mortgage and refinance rates today, July 29, 2021

Peter Warden
The Mortgage Reports editor

Today’s mortgage and refinance rates 

Average mortgage rates inched higher yesterday. But such a tiny rise is likely to make little material difference to your monthly payment or closing costs.

Judging from early movements in markets, mortgage rates today may hold steady or inch higher. But this morning’s disappointing economic numbers on gross domestic product and weekly jobless claims may put a brake on the rise. Indeed, they may pull them lower as the day progresses.

Find and lock a low rate (Jul 29th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 2.688% 2.688% -0.02%
Conventional 15 year fixed
Conventional 15 year fixed 1.99% 1.99% Unchanged
Conventional 20 year fixed
Conventional 20 year fixed 2.375% 2.375% -0.01%
Conventional 10 year fixed
Conventional 10 year fixed 1.851% 1.876% +0.01%
30 year fixed FHA
30 year fixed FHA 2.596% 3.247% -0.03%
15 year fixed FHA
15 year fixed FHA 2.344% 2.943% Unchanged
5/1 ARM FHA
5/1 ARM FHA 2.5% 3.207% Unchanged
30 year fixed VA
30 year fixed VA 2.25% 2.421% Unchanged
15 year fixed VA
15 year fixed VA 2.125% 2.445% Unchanged
5/1 ARM VA
5/1 ARM VA 2.5% 2.386% 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.
Find and lock a low rate (Jul 29th, 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?

Following yesterday’s key but uneventful Federal Reserve events, might everything return to what we now think of as normal? Maybe. I can see no reason to think not. But the recent normal is far from the normal normal.

And, if investors suddenly decide to act in accordance with the latter, mortgage rates should rise. Nearly all specialist mortgage rate forecasters believe that will happen soon. But we don’t have a great track record.

So, you might legitimately choose to surf the current downward wave by continuing to float. But be ready to lock at any moment. Because 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 rose to 1.27% from 1.26%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
  • Major stock indexes were higher shortly 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 increased to $72.91 from $72.02 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
  • Gold prices rose to $1,827 from $1,795 an ounce. (Good for mortgage rates*.) In general, it’s 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 indexrose to 30 from 27 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 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 hold steady. 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 (Jul 29th, 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

On Monday, I suggested that the Federal Reserve would have to walk a tightrope in its statement and at its news conference yesterday. Well, it safely reached the other side with barely a wobble. Its statement said:

Last December, the Committee [Federal Open Market Committee or FOMC] indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings.

— Board of Governors of the Federal Reserve System, “Federal Reserve issues FOMC statement,” July 28, 2021

Those purchases of “agency mortgage‑backed securities” are currently keeping mortgage rates artificially low. And, when the Fed “tapers” (gradually reduces) those purchases, those rates are likely to rise.

Indeed, the last time the organization signaled it would be tapering such purchases, in 2013, mortgage rates shot up.

When might the Fed push up mortgage rates?

So, the Fed kicked the can down the road yesterday. But we don’t yet know how far that kicking took it.

Still, most of the financial press seems to think it may not be too far. Here are a few headlines and subheads that followed yesterday’s statement and news conference:

  • “Fed … Teeing Up Bond Taper” — The Wall Street Journal
  • “Cue the taper” — CNN Business
  • “Fed moves closer to decision on ‘tapering’ massive stimulus” — The Financial Times
  • “The central bank gave the clearest hint yet that it will soon begin to shift bond-buying from emergency mode” — The New York Times

So, how soon a tapering is announced remains in the air. And the final decision will depend on how the economy — especially inflation and employment data — performs in the coming months. As the Fed itself said in that statement, “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook.”

Dates for your calendar

But the headlines I quoted above seem to think it will be sooner rather than later, although some observers believe it could be as late as 2022. The Fed’s calendar of FOMC meetings gives the following dates for the rest of 2021:

  • Sept. 21-22
  • Nov. 2-3
  • Dec. 14-15

But there’s an outside chance of an announcement being made at this year’s Economic Policy Symposium in Jackson Hole, Wyoming. And that’s scheduled for Aug. 26-28.

One more thing — Infrastructure

Yesterday, President Joe Biden’s $1 trillion infrastructure plan received a boost on Capitol Hill yesterday. The US Senate voted to take up a bipartisan deal. If that clears its other legislative hurdles, that should shore up the economic recovery.

Normally, I’d say that would put upward pressure on mortgage rates. But read yesterday’s edition for why it might not.

For more background, read Saturday’s weekend edition of this column.

Mortgage rates and inflation: Why are rates going up?

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. But then the trend reversed and rates rose.

However, those rises were mostly replaced by falls in April and since, though typically small ones. Freddie’s July 29 report puts that weekly average at 2.8% (with 0.7 fees and points), up from the previous week’s 2.78%.

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 July 19, Freddie’s on July 15 and the MBA’s on July 21.

Forecaster Q3/21 Q4/21 Q1/22 Q2/22
Fannie Mae 3.0% 3.1%  3.2% 3.2%
Freddie Mac 3.3% 3.4%  3.5% 3.6%
MBA 3.2% 3.4%  3.8% 4.0%

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

All these forecasts expect higher mortgage rates soon. 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.

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 (Jul 29th, 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.