Mortgage and refinance rates today, Oct. 4, 2022

Today’s mortgage and refinance rates

Average mortgage rates fell moderately yesterday. They’re still just a little higher than they were last Thursday evening. But the drop was welcome.

So far this morning, it’s looking as if mortgage rates today might fall again. But, of course, that could change later in the day.

Current mortgage and refinance rates

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.

Of course, I might be wrong. But I’m not expecting mortgage rates to fall far and for long during this last quarter of 2022.

So, my personal rate lock recommendations for the longer term 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 fell to 3.65% from 3.70%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were rising sharply soon after opening. (Sometimes bad for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices 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 $85.70 from $84.55 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices climbed to $1,719 from $1,677 an ounce. (Good 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 29 from 22 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 fall. 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:

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 broader 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.

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?

Market commentators seem to think yesterday’s fall in mortgage rates was probably down to a policy U-turn confirmed early that day by the United Kingdom government. That may well be true. Britain’s currency, the pound, bounced back up to its precrisis level against the US dollar overnight.

A quick reminder of what’s been going on in the UK. A new Conservative (aka Tory) government introduced a radical budget on Sep. 23. But it called that a “fiscal event” in order to avoid mandatory scrutiny of its figures by the independent Office for Budget Responsibility.

That immediately caused discomfort to investors, who punished both the pound and yields on UK Treasury bonds (“gilts”). They hate uncertainty and any lack of clarity or transparency.

The actual contents of the budget-by-any-other-name were no more popular with either markets or the electorate. The rookie government proposed slashing taxes, mostly for the rich, by £45 billion ($50 billion) without suggesting how those cuts would be paid for.

Yesterday’s U-turn affected only one budget measure: the removal of the top income tax rate of 45%, which would have left high earners paying 40%. Can that really have been the trigger for falling bond prices and mortgage rates in the US? Well, everyone seems to think so.

But that top-rate proposal cost only £2 billion ($2.2 billion). And that leaves £43 billion ($48 billion) in unfunded tax cuts in place.

Did investors realize that yesterday? If so, that seems a disproportionate reaction. If not, we might see higher mortgage rates once the reality of yesterday’s U-turn sinks in.

Coming soon

Watch out for employment reports this week. And be especially aware of Friday’s official employment situation report for September.

Markets will be crawling all over the figures in that. The number of new jobs created (“nonfarm payrolls”) will be very important. Higher-than-expected numbers will likely push mortgage rates up. And lower ones might pull those rates down.

But be vigilant, too, for average hourly earnings. People are worried inflation may be entering a 1970s-style cycle wherein wages chase prices and prices chase wages. If there are signs that’s the case, it might push mortgage rates higher.

Read the weekend edition of this daily article for more background about mortgage rates generally.

Recent trends

According to Freddie Mac’s archives, the weekly all-time low for mortgage rates was set on Jan. 7, 2021, when it stood at 2.65% for conventional, 30-year, fixed-rate mortgages.

Freddie’s Sep. 29 report put that same weekly average at 6.7% (with 0.9 fees and points), up from the previous week’s 6.29%.

Note that Freddie expects you to buy discount points (“with 0.9 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. Belatedly, Freddie says it plans to stop including discount points in its forecasts later this year.

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 Sep. 21 and the MBA’s on Sep. 20. Freddie’s came out around Jul. 21. But it now releases forecasts only quarterly. So, its figures soon turn stale.

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.