Today’s mortgage and refinance rates
Average mortgage rates rose moderately yesterday. Of course, these rates remain exceptionally low by historical standards. But, so far, February has been the worst month for several years.
So far this morning, markets are signaling that mortgage rates today might rise. But, with so much uncertainty and volatility, that could well change during the rest of the day.
Current mortgage and refinance rates
|Conventional 30 year fixed||4.186%||4.209%||+0.06%|
|Conventional 15 year fixed||3.409%||3.439%||+0.06%|
|Conventional 20 year fixed||3.928%||3.963%||+0.1%|
|Conventional 10 year fixed||3.476%||3.541%||+0.04%|
|30 year fixed FHA||4.201%||4.937%||-0.11%|
|15 year fixed FHA||3.692%||4.26%||+0.17%|
|30 year fixed VA||4.049%||4.252%||+0.02%|
|15 year fixed VA||3.505%||3.838%||+0.12%|
|5/1 ARM VA||4.75%||3.86%||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.|
Should you lock a mortgage rate today?
The mortgage market seems to be shrugging off tensions on Ukraine’s border, at least for now. Of course, there would be a reaction were Russia actually to invade, not least because of the ensuing disruption to global oil supplies. And mortgage rates might well fall then.
But they’re not at the moment. And investors appear to be switching their focus back to inflation and the Federal Reserve’s likely responses to it. Unfortunately, that probably means higher mortgage rates for now.
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
>Related: 7 Tips to get the best refinance rate
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 2.05% from 1.99%. (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. (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. But this is an imperfect relationship
- Oil prices moved lower to $91.42 from $92.76 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices fell to $1,854 from $1,864 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 – climbed to 37 from 32 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 might move higher. However, 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.
A lot is going on at the moment. 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?
Ukraine tensions easing?
Investors are playing a wait–and–see game concerning a possible Russian invasion of Ukraine. And they may well be proved right. Overnight, The New York Times (paywall) reported:
MOSCOW – Russia’s Defense Ministry said on Tuesday that some of the troops gathered around Ukraine were being loaded onto trains and trucks and sent back to their garrisons, a tentative sign that Russia could be stepping away from the threat of an invasion.
Of course, the Russian government is notorious for its disinformation and distraction techniques. And this whole business is far from over. Indeed, this morning, NATO’s secretary general said he was yet to see any “real de–escalation.” But Moscow’s announcement represents a glimmer of hope, geopolitically.
Unfortunately, it dims a glimmer of hope for mortgage rates. If Russia de–escalates, there’s little to stop those rates from continuing higher.
So, investors have switched their attention back to the Federal Reserve. And that means speculating about what it will do to drive down inflation.
Good employment data earlier this month freed it to act more aggressively against inflation. And a too–hot consumer price index last week increased pressure on it to do so – as did this morning’s producer price index.
But opinions are divided about just how aggressively. Some fear the worst and think a 0.5% hike in the Fed’s own rates might come in mid–March, followed by 0.25% rises six more times during 2022. Others think it will be more measured with fewer rises.
Fed rate rises don’t directly affect mortgage rates. But they’re likely to have a knock–on effect.
Meanwhile, those mortgage rates might be even more impacted by Fed decisions about the assets on its balance sheet. It’s spent nearly two years acquiring mortgage–backed securities (MBSs), which are the bonds that largely determine mortgage rates. Its holding is currently worth $2.66 trillion.
It bought MBSs in order to make mortgage rates artificially low as a pandemic–era stimulus measure. And selling them should make those rates higher. But much depends on when it starts disposing of them and in what quantities.
We’ll have to wait until March 16, after the next meeting of its Federal Open Market Committee, to see if it reveals its plans then. If it says it will sell them sooner and more quickly than most expect, that could push mortgage rates yet higher.
We’ve just seen how fragile the future is. And the dangers posed by Russia haven’t gone away yet.
Meanwhile, it’s not hard to imagine other threats that could undermine the economic recovery. Suppose a new COVID–19 variant emerged that was as infectious as Omicron and more deadly than Delta. Or what if the stock market were to crash?
Any of these possibilities – and more – could send mortgage rates tumbling. But they look to me to be relatively unlikely. And certainly not likely enough to play a part in deciding whether to lock or float your mortgage rate.
For a more detailed look at what’s happening to mortgage rates, read the latest weekend edition of this 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 that year, according to Freddie Mac.
The most recent weekly record low occurred on Jan. 7, 2021, when it stood at 2.65% for 30–year fixed–rate mortgages.
Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since last September, the rises have grown more pronounced, though not consistently so. So far in 2022, rises have been appreciable and relatively consistent.
Freddie’s Feb. 10 report puts that weekly average for 30–year, fixed–rate mortgages at 3.69% (with 0.8 fees and points), up from the previous week’s 3.55%.
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 four quarters of 2022 (Q1/22, Q2/22, Q3/22, Q4/22).
The numbers in the table below are for 30–year, fixed–rate mortgages. Fannie’s were published on Jan. 19 and Freddie’s and the MBA’s on Jan. 21.
Personally, I was surprised that Fannie Mae only slightly increased its rate forecasts in January. It believes that rates for 30–year, fixed–rate mortgages will average 3.2% over the current quarter. But, on the day its figures were published, we reported those for conventional loans were already up to 3.87%.
Do Fannie’s economists expect those rates to plummet later this month or in February or March and remain lower in the following quarters? If so, they know something that I don’t. And that their peers in Freddie and the MBA’s teams don’t, either, though I’m less optimistic than any of them.
Of course, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
Find your lowest rate today
You should comparison shop 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.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.