Mortgage and refinance rates today, July 22, 2021

Today’s mortgage and refinance rates

Average mortgage rates edged higher yesterday. But, of course, they remain very close indeed to their lowest levels in history (or, rather, since the 1970s when they began to be recorded).

Market movements first thing suggested mortgage rates today may hold steady or hardly change. But disappointing weekly figures for new jobless claims may weigh more heavily later, pulling them lower.

Find and lock a low rate (Jul 22nd, 2021)

Current mortgage and refinance rates

Program
Mortgage Rate
APR*
Change
Conventional 30 year fixed
2.765%
2.765%
+0.07%

Conventional 15 year fixed
1.99%
1.99%
Unchanged

Conventional 20 year fixed
2.49%
2.49%
+0.1%

Conventional 10 year fixed
1.856%
1.88%
+0.02%

30 year fixed FHA
2.677%
3.332%
+0.11%

15 year fixed FHA
2.373%
2.972%
Unchanged

5/1 ARM FHA
2.5%
3.213%
Unchanged

30 year fixed VA
2.25%
2.421%
Unchanged

15 year fixed VA
2.25%
2.571%
Unchanged

5/1 ARM VA
2.497%
2.391%
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 22nd, 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?

I’ve spent recent days explaining to you how the fairly sharp fall in mortgage rates we saw between Jul. 14-20 was a friendly aberration. There was no obvious trigger for it. And it may have been the result of a mass panic among investors, according to several economists and market watchers.

But the trouble with aberrations is they’re unpredictable. And nobody can be sure whether yesterday’s modest rise is the first of several or just a blip. What we do know is that mortgage rates are extraordinarily low at the moment. And, if I were you, I’d pocket my gains now by locking. Yes, you risk missing out on further falls. But you also avoid the risk of further rises, which are at least as likely.

And my personal rate lock recommendations must remain:

LOCK if closing in 7 daysLOCK if closing in 15 daysLOCK if closing in 30 daysLOCK if closing in 45 daysLOCK 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 held steady at 1.27%. (Neutral for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recentlyMajor stock indexes were mixed shortly 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 lowerOil prices rose to $70.55 from $69.19 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 down to $1,799 from $1,801 an ounce. (Neutral 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 lowerCNN Business Fear & Greed index — climbed to 28 from 23 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.

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 rise, in spite of all those “good for mortgage rates” entries. 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 22nd, 2021)

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. 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

So, we’ve learned in recent days that markets can be irrational. And that can work to your benefit or detriment. But what it also means is that they’re inherently unpredictable when they’re seized by euphoria or fear.

For the last few months, the markets most closely associated with mortgage rates have been acting in “mystifying” ways, as CNBC put it last Friday. And that’s paid off for mortgage borrowers.

Because those rates “should” have been rising but didn’t. Why should they have? Well, for three main reasons:

Mortgage rates pretty much always rise when the economy is doing well — And most forecasters are expecting 2021 to deliver the fastest growth since Ronald Reagan sat behind the Resolute DeskInflation is running warm — Again, there’s a close correlation historically between higher mortgage rates and higher inflationIf inflation persists, that will likely force the Federal Reserve to taper the $40 billion a month it currently spends keeping mortgage rates artificially low. And that might create a very sharp rise in those rates

But markets have been shrugging off those drivers (and whole slews of economic data) since April. Hence CNBC’s use of that word, “mystifying.”

But the problem is there’s no way to predict when markets might choose to follow the script again. They might decide not to do so for months. Or they could snap back in an instant.

So, in the light of those three powerful drivers, I remain fairly certain that mortgage rates will rise again in the coming days, weeks or months. And Fannie Mae, Freddie Mac and the Mortgage Bankers Association all agree (see below).

But I can’t be more precise than that. And all I can urge you to do, if you plan to float, is to be ready to lock at a moment’s notice.

When mortgage rates might keep falling

Of course, nothing is certain. And the COVID-19 pandemic might yet reemerge is ways that undermine the economic recovery and cause those three powerful drivers to melt away.

Indeed, investors would probably argue that their mystifying behavior was wholly rational because they’ve been pricing in that possibility. But there was no trigger for that behavior and you may think they’re now rationalizing their irrational behavior.

Mortgage rates and inflation: Why are rates going up?

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 mostly small ones. Freddie’s July 22 report puts that weekly average at 2.78% (with 0.7 fees and points), down from the previous week’s 2.88%.

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 rates 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 some 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 22nd, 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.

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