Today’s mortgage and refinance rates

Average mortgage rates fell yesterday, and by a worthwhile amount. However, it was smaller than Monday’s rise and less than half the combined increases over the previous two working days.

Earlier this morning, markets were signaling that mortgage rates today might fall again. But that could change as the day progresses.

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 5.197% 5.223% -0.14%
Conventional 15 year fixed 4.313% 4.347% -0.11%
Conventional 20 year fixed 5.151% 5.188% -0.16%
Conventional 10 year fixed 4.29% 4.362% -0.13%
30 year fixed FHA 5.227% 6.017% -0.08%
15 year fixed FHA 4.512% 4.959% -0.09%
30 year fixed VA 4.896% 5.113% -0.14%
15 year fixed VA 4.505% 4.847% +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.

Should you lock a mortgage rate today?

Don’t lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.

Yesterday’s drop in mortgage rates was caused by hope in markets that inflation might have peaked. If that fragile flower survives and grows, we may be in for more falls and fewer rises. Of course, nobody can predict the life expectancy of such optimism, which is based on factual but limited evidence. (Read more on this below.)

I’d still lock my mortgage rate soon, if I were you. But, if you choose to wager on this mood lasting longer, that’s not silly. Just be aware of the odds and stakes.

So, my personal rate lock recommendations for the longer term 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 fell to 2.68% from 2.72%. (Good 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. But this is an imperfect relationship
  • Oil prices climbed to $102.24 from $99.43 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 $1,979 from $1,971 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 44 from 48 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 movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. 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 fall. 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:

  1. 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
  2. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
  3. 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
  4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
  5. 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 will happen to mortgage rates in the coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

If you read yesterday’s headlines about the March consumer price index (CPI), you’ll wonder why markets were suddenly optimistic about inflation. Especially as this morning’s producer price index, which predicts future inflation, was also poor. The Wall Street Journal’s (paywall) report on the CPI read, “US Inflation Accelerated to 8.5% in March, Hitting Four-Decade High.”

Not much basis for hope there, you might think. But, buried in the Bureau of Labor Statistics report, was some better news. And that concerned “core CPI,” which is the full consumer price index with volatile food and energy costs stripped out.

Core CPI isn’t helpful for consumers because most spend a big chunk of their income on food, gas, heating and power. But it’s useful for economists because it lets them see the underlying trend, absent the fireworks of volatility.

Inflation easing?

And the core CPI wasn’t too bad. Yes, it rose in March. But, for the year-over-year measure, it inched up to 6.5% from 6.4% in February, which was a decelerating increase.

That was enough to send stock markets soaring yesterday morning. But it didn’t last. This morning’s Financial Times (paywall) reported, “US stocks reverse course and end lower as oil price rise stirs inflation fears.” And, indeed, those prices were back up over $100 a barrel overnight.

That might have strangled markets’ optimism over inflation stone dead. But it may not have, judging from how mortgage rates are moving this morning.

In an e-newsletter for The New York Times yesterday, Nobel-prizewinning economist Paul Krugman wrote:

The inflation report for March came in hot, as expected: Consumer prices are up 8.5 percent over the past year. But more than two years into the pandemic, we’re still living on Covid time, where things can change very fast — so fast that official data, even about the recent past, can give a misleading picture of what’s happening now. In this case, the Consumer Price Index — which roughly speaking measures average prices over the month — probably missed a downward turn that began in late March and is accelerating as you read this. Inflation will probably fall significantly over the next few months.

What this might mean for mortgage rates

Where does all this leave mortgage rates? We’ll have to wait to see how they fare today and tomorrow as markets further digest conflicting data and views on where inflation is heading.

The hope in the longer term is that inflation begins to fade, allowing the Federal Reserve to ease its anti-inflationary measures that otherwise will keep pushing mortgage rates higher.

But its next meeting is on May 4. And, between now and then, it will only get inflation data for March, which, as Dr. Krugman said, will probably miss “a downward turn that began in late March and is accelerating as you read this.” And, of course, nobody can be sure there is such a downturn.

Let’s hope there is. But whether evidence of it emerges before you have to close on your home purchase is anyone’s guess. I’m afraid I’m not optimistic.

Read the weekend edition of this daily article for more background.

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, the rises have grown more pronounced since last September.

Freddie’s Apr. 7 report puts that same weekly average for 30-year, fixed-rate mortgages at 4.72% (with 0.8 fees and points), up from the previous week’s 4.67%. But most of that week’s sharp rises won’t be included in that Apr. 7 figure.

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 be closer to the ones 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 Mar. 17 and the MBA’s on Mar. 22. But Freddie now publishes these forecasts every quarter, most recently on Jan. 21. So its figures are already looking very stale.

Forecaster Q1/22 Q2/22 Q3/22 Q4/22
Fannie Mae 3.7% 3.8%  3.8% 3.9%
Freddie Mac 3.5% 3.6%  3.7% 3.7%
MBA 3.8% 4.2%  4.4% 4.5%

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. Indeed, some of those numbers are starting to look silly, given where rates have climbed since the forecasts were published. And I’m afraid I’m less optimistic than any of them.

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.



Source link