Today’s mortgage and refinance rates
Average mortgage rates inched higher yesterday. But the increase was so small that many lenders won’t have changed their rates, and will instead have increased closing costs by a tiny amount.
So far this morning, it’s looking likely that mortgage rates today will rise. But be aware that the jobs report, released earlier, could create waves of volatility during the day. Read on for more analysis.Find and lock a low rate (Sep 4th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||2.809%||2.809%||Unchanged|
|Conventional 15 year fixed||1.991%||1.991%||Unchanged|
|Conventional 20 year fixed||2.49%||2.49%||Unchanged|
|Conventional 10 year fixed||1.86%||1.901%||-0.02%|
|30 year fixed FHA||2.688%||3.343%||Unchanged|
|15 year fixed FHA||2.391%||2.991%||-0.01%|
|5/1 ARM FHA||2.5%||3.207%||Unchanged|
|30 year fixed VA||2.25%||2.421%||Unchanged|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|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.|
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?
Read on for details of this morning’s jobs report and its potential impact on mortgage rates. That aside, those rates may well remain within their recent tight range for weeks to come.
But they’re bound to move outside that at some point. And, when they do, it’s more likely that they’ll rise than fall.
So, for now, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT 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 1.33% from 1.29%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were lower shortly after opening. (Good 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 edged up to $70.04 from $69.90 a barrel. (Neutral for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices moved higher to $1,824 from $1,812 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 lower
- CNN Business Fear & Greed index — fell to 53 from 59 out of 100. (Good 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 increase. 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
Anyone who read yesterday’s article will know that this morning’s official employment situation report is widely regarded as the most influential of all monthly economic reports. And we now know what it contains.
Often, with these economic reports, the difference between expectations (analysts’ forecasts) and the actual figures is more important than the figures themselves. Why?
Because investors typically trade ahead of publication based on analysts’ forecasts. So their expectations are priced in ahead of publication. And it’s the difference between what’s expected and reality that creates new trades.
So here are this morning’s actual figures (with the consensus of analysts’ forecasts compiled by MarketWatch in brackets):
- Nonfarm payrolls (new jobs created during August, excluding on farms): +235,000 (+720,000)
- Average hourly earnings: +0.6% (+0.3%)
- Unemployment rate: 5.2% (5.2%)
Those are roughly in order of importance. However, this morning’s Financial Times says, in a headline, “Investors eye labor market inflation risks.” So average hourly earnings may be more in focus than usual.
And you can see that the headline figure for new jobs is deeply disappointing.
The report’s implications for mortgage rates
As I explained yesterday, you’d normally expect mortgage rates to rise on better-than-expected numbers and fall on worse ones. But that may not necessarily be the case today.
Because this morning’s bad report might mean that the Federal Reserve keeps its foot on the gas for longer when it comes to its easy-money policies. And investors would be very happy about that. Before today, some thought the Fed might “taper” (gradually reduce and then stop) its purchases of bonds as early as Sept. 22. But now early November or mid-December look more likely.
But there’s another layer of complication. Sometimes, markets respond to important economic reports with a knee-jerk reaction. And then reflect more carefully as the day progresses. So what we’re seeing at the time this article was published (soon after 10 a.m. (ET)) may not hold good as the hours pass.
For more background, read Saturday’s weekend edition of this column. And my colleague Tim Lucas’s longer-term forecast, Mortgage interest rates forecast and trends: Will rates go down in September 2021?
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 have been mostly replaced by falls since April, though typically small ones. Freddie’s Sept. 2 report puts that weekly average at 2.87% (with 0.6 fees and points), unchanged from the previous week’s 2.87%.
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 and the MBA’s were updated on Aug. 19. But Freddie’s were last refreshed on July 15 because it now publishes these figures only quarterly. And its forecast is already looking stale.
However, given so many unknowables, the whole 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.
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.