Today’s mortgage and refinance rates
Average mortgage rates fell again yesterday. They didn’t plunge quite as far as they did on Monday. But it was still a sharp fall.
Unfortunately, markets were signaling first thing this morning that mortgage rates today might rise. But, obviously, markets are highly volatile at the moment. So things could change as the day progresses.
Current mortgage and refinance rates
|Conventional 30 year fixed||3.856%||3.878%||-0.1%|
|Conventional 15 year fixed||3.252%||3.286%||-0.11%|
|Conventional 20 year fixed||3.738%||3.775%||-0.1%|
|Conventional 10 year fixed||3.177%||3.244%||-0.09%|
|30 year fixed FHA||4.029%||4.789%||-0.12%|
|15 year fixed FHA||3.461%||4.082%||-0.14%|
|5/1 ARM FHA||4.75%||4.758%||Unchanged|
|30 year fixed VA||3.992%||4.198%||-0.07%|
|15 year fixed VA||3.571%||3.921%||-0.06%|
|5/1 ARM VA||3.324%||3.38%||-0.52%|
|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 narrative in the financial press is morphing as Russia’s invasion of Ukraine enters its seventh day and fighting intensifies. More commentators now believe the war will affect the Federal Reserve’s actions to counter inflation.
And that’s important for mortgage rates. If the Fed acts less aggressively on inflation, there will be much less pressure on those rates to resume their recent upward trend.
I’m not yet ready to change my rate lock recommendations, especially given the direction of markets this morning. And, even more especially, as Federal Reserve Chair Jerome Powell told a House committee this morning that, in The Wall Street Journal’s words (paywall): ” … it would be appropriate for the central bank to raise its benchmark interest rate at its meeting in two weeks amid high inflation, strong economic demand and a tight labor market.”
Of course, this doesn’t necessarily mean that mortgage rates have exhausted the falls that Russia’s predicament might deliver. But it does mean that, on the balance of probabilities, my personal rate lock recommendations must 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 1.79% from 1.77%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes increased 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. But this is an imperfect relationship
- Oil prices jumped to $108.48 from $101.52 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices inched up to $1,929 from $1,924 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 – fell to 20 from 22 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 might rise. 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?
Yesterday, I explained why I thought the international community’s sanctions against Russia were unlikely to push mortgage rates lower for long. Briefly, Russia is fairly unimportant to the global economy, with a gross domestic product just a little over half that of France.
That view was reinforced yesterday when The Wall Street Journal revealed in an e–newsletter that “among S&P 500 companies, only 1% of revenues stem from Russia and Ukraine.”
Meanwhile, Tuesday’s New York Times (paywall) reported:
After analyzing the performance of the S&P 500 since 1945, UBS Global Wealth Management found that markets usually fell during the first week of key military conflicts. But in 14 of 18 cases, they rose within three months.
Still, also yesterday, the financial press began to change its tune. And a growing body of opinion believes that Russia’s actions in Ukraine will cause the Federal Reserve to moderate its anti–inflationary actions.
“Yes. It’s still the Fed, stupid!”
This morning’s Financial Times (paywall) carries the headline, “Why the war on Ukraine is a turning point for markets too – The shock to Europe’s economy will overturn the debate on monetary policy.”
Contrast that with a headline from Monday’s edition of the same newspaper: “Ukraine war unlikely to deflect Fed from path of interest rate rises – Officials are convinced of the need to tighten policy even as Russia’s invasion clouds the economic outlook”
Meanwhile, a Wall Street Journal e–newsletter yesterday noted, ” … disruptions from the war, many believe, will make the Federal Reserve less inclined to raise interest rates sharply at its March meeting.”
Are the right minds being changed?
Clearly, minds are being changed. But the only minds that matter are those of the Fed officials who determine the central bank’s monetary policy, which directly impacts mortgage rates. And Mr. Powell’s remarks on Capitol Hill this morning imply that those officials remain determined to tackle inflation, though not necessarily as aggressively as some previously thought.
Only a week or two ago, many investors expected a 0.5% hike in the Fed’s own interest rates. And an early start to the Fed’s sale of mortgage bonds.
Both of those would almost certainly have seen mortgage rates push strongly higher. Now, the hike might be only 0.25% and the Fed could yet choose to postpone its sales of mortgage bonds.
More wait and see
But we just don’t know what’s coming next. And, while that uncertainty has been a big part of why mortgage rates have been falling, there’s less likelihood this morning of the Fed turning tail and running away from the inflation issue.
But we’ll have to wait two weeks for a Fed news conference on March 16 to be sure what’s coming next.
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. 24 report puts that weekly average for 30–year, fixed–rate mortgages at 3.89% (with 0.8 fees and points), down from the previous week’s 3.92%.
Note that Freddie expects you to buy discount points (“with 0.8 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would have been well over 4% that week, which is closer to the rates we and others quote.
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 Feb. 18 and the MBA’s on Feb. 25. But Freddie now publishes these forecasts every quarter, most recently on Jan. 21.
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.