Today’s mortgage and refinance rates
Average mortgage rates nudged lower again yesterday. And by a worthwhile amount. Every little gain is welcome. However, it’s too soon to hope that this is the start of a sustained period of falls.
Indeed, early market movements, unfortunately, suggest that mortgage rates today are likely to rise, boosted by strong retail sales figures this morning.Find and lock a low rate (Oct 15th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||3.203%||3.222%||-0.04%|
|Conventional 15 year fixed||2.53%||2.556%||Unchanged|
|Conventional 20 year fixed||2.945%||2.98%||-0.05%|
|Conventional 10 year fixed||2.438%||2.495%||Unchanged|
|30 year fixed FHA||3.154%||3.914%||-0.04%|
|15 year fixed FHA||2.539%||3.183%||-0.02%|
|5/1 ARM FHA||2.521%||3.126%||Unchanged|
|30 year fixed VA||2.984%||3.175%||-0.03%|
|15 year fixed VA||2.732%||3.082%||Unchanged|
|5/1 ARM VA||2.55%||2.356%||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?
Don’t assume that falls over the last couple of days are the beginning of a new trend. Of course, nothing’s impossible. But read on for why I think it’s unlikely.
Meanwhile, 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 rose to 1.57% from 1.54%. (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 increased to $82.34 from $80.81 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity.
- Gold prices tumbled to $1,769 from $1,797 an ounce. (Bad 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 — climbed to 48 from 37 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, 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
Stock market indexes soared yesterday as a new season began during which companies reveal their latest quarterly earnings. Sometimes, higher indexes lead to higher mortgage rates. But that wasn’t the case yesterday. And it may be that investors were on a bit of a sugar rush.
There are forces trying to drag mortgage rates down. Most notable among those are supply chain issues, which look set to bring further shortages of some goods. Sales of new cars and trucks have been especially badly hit by a global shortage of computer chips.
Of course, there’s no doubt that this is slowing the economic recovery. And mortgage rates tend to be high during good times and low during bad.
More powerful forces
However, the forces aligned to push mortgage rates higher seem more potent to me. To start with, the economy is still booming, even if growth is a little slower than economists expected earlier in the year. And nationwide infection rates for COVID-19 have been tumbling for more than a month, releasing one brake on the recovery.
Meanwhile, inflation is proving much more persistent than the Federal Reserve and others were forecasting a few months ago. Now, it’s possible that disappointing inflation data released earlier this week have fed into the lower mortgage rates we’ve been seeing — just as a general driver of pessimism.
But that’s unlikely to last. Because higher inflation almost inevitably leads to higher mortgage rates. Why would investors in fixed-income assets (including mortgage-backed securities — a type of bond that largely determines mortgage rates) want to own bonds with low yields when all their profits are eaten up by inflation? Yields and mortgage rates have to rise in order for those investments to remain attractive.
And, on top of all that, we have “tapering.” That’s the imminent winding down of the Fed’s purchases of mortgage-backed securities, something that’s been keeping mortgage rates artificially low for 18 months. I covered that in more depth yesterday.
Higher mortgage rates ahead?
In my view, the forces set to push mortgage rates higher look much more powerful than those trying to drag them lower. I’m sad to have to say that. And I pine for those heady times in 2020 when I could deliver good news to you pretty much daily. But I suspect rises — punctuated by occasional periods of falls — are here to stay.
Of course, I may be proved wrong. It might take only one momentous calamity (maybe a new, much worse variant of COVID-19) to crash the economy and throw mortgage rates into reverse. But let’s hope that doesn’t happen.
For more details about the Fed’s plans 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, since early September we’ve been seeing rises.
Freddie’s Oct. 14 report puts that weekly average for 30-year, fixed-rate mortgages at 3.05% (with 0.7 fees and points), up from the previous week’s 2.99%. Freddie Chief Economist Sam Khater remarked in a statement that day:
The 30-year fixed-rate mortgage rose to its highest point since April. As inflationary pressure builds due to the ongoing pandemic and tightening monetary policy [the Fed’s tapering], we expect rates to continue a modest upswing.
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.