Today’s mortgage and refinance rates
Average mortgage rates did fall yesterday. But only by the smallest measurable amount. Of course, these rates remain incredibly low by historical standards. But they’re appreciably higher than they were a couple of weeks ago.
Movements in mortgage rates today are unpredictable. That’s because they’re likely to be almost completely reliant on events later on Capitol Hill. And nobody has a clue how they will turn out. But, for what it’s worth, those rates were appreciably higher first thing.Find and lock a low rate (Sep 30th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||3.155%||3.171%||-0.02%|
|Conventional 15 year fixed||2.499%||2.522%||Unchanged|
|Conventional 20 year fixed||3.027%||3.06%||-0.01%|
|Conventional 10 year fixed||2.458%||2.513%||-0.04%|
|30 year fixed FHA||3.147%||3.908%||Unchanged|
|15 year fixed FHA||2.546%||3.191%||+0.01%|
|5/1 ARM FHA||2.444%||3.091%||+0.03%|
|30 year fixed VA||2.962%||3.154%||-0.02%|
|15 year fixed VA||2.723%||3.072%||Unchanged|
|5/1 ARM VA||2.537%||2.325%||+0.02%|
|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?
It’s too soon to assume that yesterday’s tiny fall in mortgage rates is significant. I’ve been saying for a couple of weeks that occasional days and periods of falls are inevitable, regardless of the underlying trend.
So it’s more than possible that yesterday’s drop (and any subsequent ones) are simply bond markets taking a breather before continuing on upward for yields and mortgage rates. And I suspect that’s the case.
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 climbed to 1.54% from 1.50%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were 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 fell to $73.37 from $74.64 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 $1,739 from $1,738 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 higher to 31 from 28 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.
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, even with that caveat, mortgage rates today are highly unpredictable.
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
Today is a hugely important one for mortgage rates. Because events in Congress later will determine whether they rise or fall, perhaps significantly.
Yesterday evening, The Washington Post (paywall) referred to “the sheer magnitude of the legislative activity on Capitol Hill” today. And it summed up what’s at stake:
President [Joe] Biden and congressional Democrats raced in the final hours before key votes on Thursday to salvage a signature economic initiative and stave off a government shutdown, hoping to quell a rebellion among their own party while mollifying last-minute Republican concerns about a separate spending bill.
Clearly, nobody can be sure how this will play out. Indeed, whichever way key votes go, we can’t be certain how markets will react.
Success for the president would avert a government shutdown tomorrow and raise the debt ceiling, at least temporarily. And markets would welcome passage of his $1-trillion infrastructure plan.
All those would improve the economic outlook, something that would normally push mortgage rates higher. On the other hand, failures across the board would worsen that outlook and probably lower those rates.
But failure to raise the debt ceiling might also push those rates upward. Because, as the possibility of the US defaulting on its debts looms (Oct. 18 is the current date on which that would probably begin to happen), you’d normally expect higher borrowing costs across the board, including for mortgages. And, conversely, investors might reduce those rates out of sheer relief if that potentially catastrophic danger were to be avoided.
So, this really is a wait-and-see day.
Sustained lower rates unlikely
But whatever happens to the debt ceiling, two other forces remain in place that are acting to push mortgage rates higher.
First, the Federal Reserve remains highly likely to begin to wind down (“taper,” in Fed-speak) its quantitative easing (easy money) program on Nov. 3. For the last 18 months, that’s been keeping mortgage rates artificially low. And, as it’s withdrawn, it’s almost inevitable that those rates will increase. Indeed, the rises we’ve seen over the last couple of weeks are mostly down to the Fed signaling that Nov. 3 date and investors moving in anticipation of it.
Secondly, infection rates for COVID-19 continue to fall unexpectedly. This is allaying fears among investors about the extent of the economic damage the pandemic might inflict. And that, too, is pushing mortgage rates higher.
Those two forces are why I’m expecting higher mortgage rates over the coming weeks. If the debt ceiling is raised today, that just might give us a respite. But I fear it will be a brief one.
As always, I must mention that sustained and significant falls in those rates are never impossible. But it would likely require some huge event to deliver them. And one of those looks highly improbable right now.
For more details of what’s going on, read last Saturday’s weekend edition of this daily report.
Recently — Updated today
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.