Today’s mortgage and refinance rates 

Average mortgage rates rose appreciably last Friday. I wasn’t expecting that. And I explored the likely reasons In last Saturday’s weekend edition of this column. Of course, these rates remain remarkably low by all but recent standards.

There may be better news this morning. Because mortgage rates today look likely to fall.

Find and lock a low rate (Sep 20th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.023% 3.038% -0.03%
Conventional 15 year fixed 2.377% 2.402% -0.01%
Conventional 20 year fixed 2.88% 2.913% -0.02%
Conventional 10 year fixed 2.311% 2.364% -0.01%
30 year fixed FHA 2.987% 3.744% -0.01%
15 year fixed FHA 2.437% 3.079% Unchanged
5/1 ARM FHA 2.16% 2.971% Unchanged
30 year fixed VA 2.828% 3.018% -0.02%
15 year fixed VA 2.674% 3.023% +0.02%
5/1 ARM VA 2.421% 2.272% 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 (Sep 20th, 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?

It’s too soon to assume the rises last Thursday and Friday will turn out to be more than temporary blips. However, they do show that mortgage rates are no longer constrained by their more-than-month-long tight range.

However, the risks associated with floating are growing. Wednesday’s Federal Reserve news conference could (but probably won’t) be a turning point for these rates. And the chances of Congress playing politics with the debt ceiling are increasing. (More below.)

So I’ve changed my personal rate lock recommendations to reflect new risks. But I may change them again as soon as Thursday if that Fed event is a damp squib:

  • 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

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 last Friday, were:

  • The yield on 10-year Treasury notes fell to 1.33% from 1.38%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
  • Major stock indexes were sharply 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 decreased to $71.01 from $71.85 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
  • Gold prices inched up to $1,757 from $1,752 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 indextumbled to 24 from 40 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 fall. 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 (Sep 20th, 2021)

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 wider 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. 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

Stock markets this morning are spooked by a crisis in the Chinese property market. And that seems to be feeding into bond markets and from there into mortgage rates.

This week’s scheduled economic reports are unlikely to move mortgage rates far. But Wednesday’s Fed news conference could.

Tapering

It all depends on what’s said then. If Fed Chair Jerome Powell announces that he’s soon going to begin to slow and ultimately stop (“taper”) keeping mortgage rates artificially low, they could rise sharply — even if that tapering start date is delayed.

Personally, I doubt he will make that announcement. But others disagree. And there is certainly a body of opinion within the Fed that thinks he should. So don’t underestimate the risk.

Debt ceiling

Responsibility for the other growing risk to low mortgage rates rests with Congress. The US government will run out of money sometime in mid-October. And there are politically driven maneuvers surrounding raising the debt ceiling, which I mentioned last week.

It’s important to recognize that the debt ceiling only permits the Treasury to borrow enough money to pay for things that Congress has already authorized. For that reason, the US is, as far as I am aware, the only nation on earth to separate the ceiling from spending laws. Elsewhere, an executive is empowered by each such law to borrow the required sums.

The last time the debt ceiling became a political football was in 2011. Those who wanted not to raise it eventually caved. But, by taking it to the brink, the US’s credit rating was reduced and interest rates spiked. You’re unlikely to want history to repeat itself over the next few weeks.

Recently

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, in April and after, those rises were mostly replaced by falls, though typically small ones. And, more recently, rates have hardly budged. Freddie’s Sept. 16 report puts that weekly average at 2.86% (with 0.7 fees and points), down from the previous week’s 2.88%.

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.

Forecaster Q3/21 Q4/21 Q1/22 Q2/22
Fannie Mae 2.8% 2.9%  3.0% 3.0%
Freddie Mac 3.3% 3.4%  3.5% 3.6%
MBA 2.9% 3.3%  3.5% 3.7%

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.

Verify your new rate (Sep 20th, 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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