Today’s mortgage and refinance rates
Average mortgage rates edged higher yesterday. That means we haven’t seen a fall since Monday. Still, these rates remain extraordinarily low by historical standards.
This morning’s employment report disappointed many. And markets seem unsure which way to jump. But early signs suggest mortgage rates today may move higher. However, that could change as investors digest the jobs data.
Current mortgage and refinance rates
Conventional 30 year fixed
Conventional 15 year fixed
Conventional 20 year fixed
Conventional 10 year fixed
30 year fixed FHA
15 year fixed FHA
5/1 ARM FHA
30 year fixed VA
15 year fixed VA
5/1 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?
With the debt ceiling out the way until early December, investors will be focusing on this morning’s job numbers, which were mediocre. Will that be enough to delay further rises in mortgage rates? Maybe. But I doubt it.
Indeed, the range of likely influences on those rates that are trying to push them higher seems to me to be much stronger than the forces trying to drag them lower.
So my personal rate lock recommendations 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 rose to 1.60% from 1.56%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
Major stock indexes were mixed soon 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 lower
Oil prices climbed to $79.62 from $76.61 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
Gold prices nudged up to $1,776 from $1,757 an ounce. (Neutral for mortgage rates*.) In general, it is 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 — inched higher to 36 from 35 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, mortgage rates today look likely to rise. But 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. 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
This morning’s employment situation report is arguably the most important of all economic reports in the current environment. So I’d likely be writing about it no matter what.
But what matters today is that the Federal Reserve has signaled that this morning’s report would be crucial to its decision over when to wind down (“taper”) its “quantitative easing” (cheap money) program.
And that program has probably been the single most important driver of low mortgage rates over the last 18 months. Because the Fed’s been buying mortgage-backed securities (a type of bond, the yields on which largely determine mortgage rates) at a rate of $40 billion a month.
And it’s close to certain that, as the Fed slowly turns off that faucet over the coming months, mortgage rates will rise.
Were this morning’s mediocre jobs figures enough to postpone the tapering announcement, which most have been expecting to come after the Fed’s next policy meeting on Nov. 3? Nobody can be sure.
And, while I personally doubt it, it will be investors’ takes on that question that will ultimately decide what happens next to mortgage rates. If enough agree with me, those rates may continue higher. But if enough believe the Fed will delay its tapering announcement, that would relieve some of the upward pressure.
Sustained rises now?
In any event, other forces seem set to push rates higher. From continuing falls in COVID-19 infection rates to data that overall suggest that the economic recovery is largely on track, the days of uberlow mortgage rates look numbered.
That’s not to say that those rates will rise in a straight line. There will inevitably be days and longer periods of falls. But I suspect that the overall, sustained trend will be upward.
Of course, nothing’s inevitable. And it’s never impossible that some huge event will unexpectedly appear that disrupts everything. So you can never rule out lower rates. But, to me, those look way less likely than higher ones.
For more details about the Fed’s actions and other influences on mortgage rates, read last Saturday’s weekend edition of these daily reports.
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 moderately.
However, from April, those rises were mostly replaced by falls, though typically small ones. More recently, we had a couple of months when those rates barely moved. But, unfortunately, September brought some sharp rises.
Freddie’s Oct. 7 report puts that weekly average for 30-year, fixed-rate mortgages at 2.99% (with 0.7 fees and points), down from the previous week’s 3.01%.
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 Sept. 20 and the MBA’s on Sept. 22. But Freddie’s were last refreshed on July 15 because it now publishes these figures only quarterly. And its forecast is looking seriously stale.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
All these forecasts expect higher mortgage rates soon or fairly 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. Or perhaps Fannie believes tapering will have little impact.
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.