Today’s mortgage and refinance rates
Average mortgage rates nudged lower yesterday, as expected. It was in line with the small daily variations we’ve grown used to recently.
First thing, there were signs of more good news. And mortgage rates today look likely to fall again. But nobody seems quite sure why.
Current mortgage and refinance rates
Conventional 30 year fixed
Conventional 15 year fixed
Conventional 20 year fixed
Conventional 10 year fixed
Conventional 5 year ARM
30 year fixed FHA
15 year fixed FHA
5 year ARM FHA
30 year fixed VA
15 year fixed VA
5 year ARM VA
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?
Yesterday’s fall (and today’s likely one) may turn out to be just another couple of routine daily blips. And mortgage rates remain within the very tight range we’ve been seeing for some weeks.
But we may be just a single trigger away from higher rates. And that could come as soon as tomorrow, when the monthly consumer price index is published.
Of course, whether that changes anything will depend on the figures it reveals. But many economists and industry insiders expect mortgage rates to move higher soon.
And that’s why 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 Treasurys fell to 1.47% from 1.53%. (Good 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 again mixed on 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 $70.28 from $68.55 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. Gold prices edged up to $1,900 from $1,896 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 — inched up to 52 from 51 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 move lower. 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. But some types of refinances are higher following a regulatory change
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
Inflation remains at the front of many investors’ minds. And you can see why. Yesterday, we quoted a New York Times article that talked of “some highly qualified independent economists” who think “the inflation rate could exceed 4 percent and even reach 7 percent over the next few years.” And we described how higher inflation could lead to sharply higher mortgage rates.
But, of course, not all economists share that view. If you’d like an alternative perspective, read an article in today’s Guardian (with British spellings) by economics professor William Mitchell. He’s a founder of modern monetary theory (MMT), which proposes very different drivers of inflation:
Inflation hawks claim the large deficits and central bank bond buying programmes — quantitative easing, or QE, which is mischaracterised as “money printing” — will deliver Zimbabwe-like outcomes. However, they just misunderstand how governments spend and are ignorant of the history of hyperinflations.
We’ll have to wait to see whether Professor Mitchell or the inflation hawks are proved right.
Higher mortgage rates regardless of inflation?
If it’s those inflation hawks who are correct, we may well see sharply higher mortgage rates. However, if they’re wrong, we’re still likely to see higher ones. But the rises may be gentler.
That’s because mortgage rates tend to move higher as economic conditions improve. And many economists are expecting this year to deliver the biggest growth in US gross domestic product since the Reagan administration.
That prospect was given a boost yesterday by the World Bank, which revised its forecasts. It now expects the global economy to achieve the fastest recovery in 80 years in 2021.
But might none of this come about? Of course! Economies are inherently unpredictable. But, beginning sometime soon, higher mortgage rates are currently looking way more likely than lower ones.
For more background, read our latest weekend edition, which has more space for in-depth analyses.
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, though those moderated during the second half of that month. Meanwhile, May saw falls very slightly outweighing rises. Freddie’s June 3 report puts that weekly average at 2.99% (with 0.6 fees and points), up from the previous week’s 2.95%.
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 rates forecasts for the remaining quarters of 2021 (Q2/21, Q3/21, Q4/21) and the first quarter of 2022 (Q1/22).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on May 19 and the MBA’s on May 21. Freddie’s forecast is dated April 14. But it now updates only quarterly. So expect its numbers to begin to look stale soon.
However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.
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.
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.