Today’s mortgage and refinance rates
Average mortgage rates edged lower again yesterday as key infrastructure legislation stalled in Congress. These rates remain extraordinarily low by almost every historical standard. But they’re not as low as they were five or six weeks ago.
So far this morning, mortgage rates today are looking likely to fall. However, there’s plenty on the calendar that could turn that around later.Find and lock a low rate (Oct 1st, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||3.122%||3.14%||-0.03%|
|Conventional 15 year fixed||2.47%||2.498%||-0.02%|
|Conventional 20 year fixed||2.949%||2.981%||-0.08%|
|Conventional 10 year fixed||2.402%||2.447%||-0.07%|
|30 year fixed FHA||3.129%||3.889%||-0.02%|
|15 year fixed FHA||2.515%||3.158%||-0.03%|
|5/1 ARM FHA||2.483%||3.105%||+0.01%|
|30 year fixed VA||2.894%||3.084%||-0.07%|
|15 year fixed VA||2.725%||3.074%||Unchanged|
|5/1 ARM VA||2.56%||2.338%||+0.01%|
|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?
Bond markets seem to be taking a breather as Congress gets its act together (or doesn’t) over some key points on the president’s agenda.
But it still seems much more likely that mortgage rates will rise soon rather than fall.
So my personal rate lock recommendations remain:
- 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 yesterday, were:
- The yield on 10-year Treasury notes fell to 1.48% from 1.54%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were mostly higher soon after opening. (Bad 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 $75.15 from $73.37 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices rose to $1,758 from $1,739 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 — edged lower to 27 from 31 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, 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.
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
Yesterday, one crisis was averted in Congress. The government shutdown, which was due to start at midnight that day, no longer will. But the financial doomsday clock that’s counting down to Oct. 18, when the debt ceiling will be reached, is still ticking.
If the ceiling isn’t raised by then, the United States will begin to default on its debts for the first time in history. And that’s way more scary than any short-term government shutdown.
Here’s what a 2013 US Treasury report had to say about such a default scenario:
Credit markets could freeze, the value of the dollar could plummet, US interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.
The last time legislators took that ceiling to the brink was in 2011. And then America’s credit rating was downgraded and borrowing costs increased across the board. Note that those events occurred even though the ceiling was raised before the deadline. Just showing that it was possible that the country could default was enough to wreak real damage.
Now, a decade on, no lessons have been learned. And, were the debt ceiling actually to cause defaults, the consequences would be incalculable. But they’d almost certainly include higher borrowing costs on all forms of debt, including mortgages.
So far, this possibility has probably had only limited effects on mortgage rates. But, as that particular doomsday clock ticks down, its impact on those rates is likely to grow. And not in a good way.
Other reasons higher mortgage rates are likely to rise
Mortgage rates may have fallen over the last couple of days and might fall again today. But such brief blips are to be expected in all markets at all times.
And I have two reasons, beside the debt ceiling, for thinking mortgage rates will move higher:
- The Federal Reserve has signaled that it’s highly likely it will begin to wind down its quantitative easing program on Nov. 3. And that program has been keeping mortgage rates artificially low for 18 months. So rates are almost certain to rise when the Fed begins to turn off its cheap-money faucet. Indeed, most of the rises in mortgage rates over the last couple of weeks are probably down to investors positioning themselves ahead of Nov. 3
- Another driver of low mortgage rates has been investors’ fear of the economic damage the COVID-19 pandemic might cause. But, since mid-September, rates of new infections have been falling, with the number of deaths following suit as of yesterday. As those fears evaporate, so does their downward pressure on mortgage rates
Yes, it’s never impossible that some hugely damaging event will arise that changes all those calculations and pushes mortgage rates lower. Perhaps the most likely of those is the possible emergence of some virulent new variant of COVID-19 that undoes the economic recovery.
That might happen. But it probably won’t. Or let’s hope not.
For more details of what’s going on, read last Saturday’s weekend edition of this daily report.
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 Sept. 30 report puts that weekly average for 30-year, fixed-rate mortgages at 3.01% (with 0.7 fees and points), up from the previous week’s 2.88%. Personally, I’m surprised that increase was so modest because other sources suggest a sharper one.
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 soon-ish. 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.