Today’s mortgage and refinance rates
Average mortgage rates rose sharply yesterday. The increase wiped out all last week’s gains and left those rates where they were last Monday. Still, they remain well down on the highs seen in the first week of May.
Sadly, markets first thing this morning were signalling that mortgage rates today might rise again or hold steady. But that could change as the day progresses.
Current mortgage and refinance rates
|Conventional 30 year fixed||5.416%||5.441%||+0.2%|
|Conventional 15 year fixed||4.529%||4.56%||+0.14%|
|Conventional 20 year fixed||5.332%||5.365%||+0.06%|
|Conventional 10 year fixed||4.568%||4.635%||+0.1%|
|30 year fixed FHA||5.321%||6.141%||-0.02%|
|15 year fixed FHA||4.727%||5.172%||+0.17%|
|30 year fixed VA||4.942%||5.156%||+0.06%|
|15 year fixed VA||5.25%||5.599%||+0.63%|
|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, I wrote: “The stock market is mercurial at the moment. One week it’s plunging, and the next it’s soaring.”
That was borne out by events yesterday. We’ve one consolation: There’s no more reason to think that yesterday’s sharp rise in mortgage rates signaled a long-term change than that last week’s falls did. It’s all still likely down to volatility resulting from uncertainty.
But, because I’m cautious, 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 inched higher to 2.85% from 2.84%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were modestly 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 fell to $117.31 from $118.87 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
- Gold prices moved lower to $1,844 from $1,851 an ounce. (Neutral for mortgage rates*.) It is generally 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 — rose to 27 from 23 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 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 edge higher or remain unchanged. 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 broader 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 will happen to mortgage rates in the coming hours, days, weeks or months.
Are mortgage and refinance rates rising or falling?
After months of sharp rises in mortgage rates, May brought a period of falls. Unfortunately, I still have way too little information to make reliable predictions about where those rates will go next.
But my gut tells me there may be more rises soon. Yesterday’s Wall Street Journal (paywall) gave a good summary of the issues in play:
Prices are falling for bonds backed by agency mortgage loans from government-owned lenders Fannie Mae and Freddie Mac. That is primarily because the Fed has started raising interest rates, which hits the value of all existing fixed-rate bonds, but also because it might start selling some of its $2.7 trillion holdings of the bonds, potentially further diminishing their value. Analysts worry that Fed sales of existing bonds could flood the market, driving down prices and pushing yields higher as bond investors demand more compensation to lend money. That would boost mortgage rates because bond yields act as benchmarks for real-estate lenders.
Let’s unpack that a bit. Mortgage rates are determined mainly by ever-changing yields on a type of bond called a mortgage-backed security (MBS). Like all bonds, MBS prices move inversely to their yields. So, when demand is higher than supply, prices rise, and yields fall. And the opposite happens when supply outstrips demand.
When the Fed raises its interest rates, demand for MBSs typically falls because investors find those bonds less attractive. That’s because they can probably get better yields elsewhere. Similarly, if the Fed does “flood the market” with its vast stockpile of MBSs, prices will fall, and yields (and mortgage rates) rise, based on supply and demand.
Priced in? Or not?
To some extent, markets have already baked these events into the prices — and therefore yields and mortgage rates — of current MBSs. They’ve known this was on the way for months and have acted in anticipation. That’s why mortgage rates were climbing earlier this year.
The question now is: Have they anticipated the Fed’s moves adequately? Or will mortgage rates have to rise when those events begin to unfurl? Nobody can be sure.
And my belief that those rates have further to climb is no more than a gut feeling. While several leading experts agree with me, not everyone does. However, few expect sustained falls.
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.
Rates then bumbled along, moving little for the following eight or nine months. But they began rising noticeably that September. Unfortunately, they’ve been mostly shooting up since the start of 2022.
Freddie’s May 26 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.1% (with 0.9 fees and points), down from the previous week’s 5.25%.
Note that Freddie expects you to buy discount points (“with 0.9 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 remaining three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on May 19, and the MBA’s on May 16. Freddie’s were released on Apr. 18. But it now updates its figures only quarterly so they’re already looking stale.
Of course, given so many unknowables, the whole current crop of forecasts might 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.