Today's mortgage and refinancing rates
Average mortgage rates fell inches yesterday. That was a pleasant surprise. Because it probably looked like they'd get up earlier that day.
This morning the markets are again suggesting that Mortgage rates could go up today. But remember yesterday's lesson: even short-term predictions are suspect in the current volatile environment.
Find and lock a cheap rate (October 7, 2021)
Current mortgage and refinancing rates
Effective interest rate*
Conventional 30 years
Conventionally fixed for 15 years
Conventional 20 years old
Conventionally fixed for 10 years
30 years permanent FHA
Fixed FTA for 15 years
5/1 ARM FHA
30 years of permanent VA
15 years fixed VA
Prices are provided by our partner network and may not reflect the market. Your rate can be different. Click here for an individual price offer. View our rate assumptions here.
Find and lock a cheap rate (October 7, 2021)
COVID-19 Mortgage Updates: Mortgage lenders are changing interest rates and rules due to COVID-19. Click here to learn how the coronavirus could affect your home loan.
Should You Lock A Mortgage Rate Today?
The market, which largely determines mortgage rates, appears to have been on hold since September 24th, with daily increases and decreases often canceling each other out. You may act more decisively once Friday's employment report comes in.
But even a terrible employment report will likely only delay future increases, while a better one would likely push them up faster. And these increases seem very likely when compared to the odds of sustained and significant falls.
So my personal rate lock recommendations remain:
LOCK when close in 7th DaysLOCK when close in fifteen DaysLOCK when close in 30th DaysLOCK when close in 45 DaysLOCK when close in 60 Days
However, I am not claiming perfect foresight. And your personal analysis could be as good as mine – or better. So let your instincts and your personal risk tolerance guide you.
Market Data Affecting Mortgage Rates Today
Here's a snapshot of what was now this morning at around 9:50 a.m. ET. The dates, compared to about the same time yesterday, were:
the 10 year Treasury note yield held constant at 1.51%. (Neutral for mortgage rates.) More than any other market, mortgage rates usually follow these particular government bond yields
Important stock indices were higher shortly after opening. (Bad for mortgage rates.Often times, when investors buy stocks, they sell bonds, which depresses the prices of those stocks and increases yields and mortgage rates. The opposite can happen when the indices are lower
Oil prices climbed to $ 78.64 from $ 77.25 a barrel. (Bad for mortgage rates *.) Energy prices play a huge role in creating inflation and also indicate future economic activity.
Gold prices increased from $ 1,755 $ 1,752 an ounce. (Neutral for mortgage ratesIn general, it is better for interest rates when gold rises and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to cut rates
CNN Business Fear and Greed Index – Inches to 28 by 27 From 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) when they exit the bond market and invest in stocks, while “fearful” investors do the opposite. So lower values are better than higher ones
* A change of less than $ 20 in gold prices or 40 cents in oil prices is a fraction of 1%. Therefore, when it comes to mortgage rates, we only count meaningful differences as good or bad.
Reservations about markets and prices
Before the pandemic and the Federal Reserve's interventions in the mortgage market, you could look at the numbers above and make a pretty good guess as to what would happen to mortgage rates that day. But that is no longer the case. We still use the phone every day. And they are mostly right. But our records for accuracy will not reach its previous high levels until things settle down.
Use markets as a rough guide only. Because they have to be extraordinarily strong or weak to be able to rely on them. But with this caveat, Mortgage rates are likely to rise today. Note, however, that "intraday swings" (when prices change direction during the day) are a common feature these days.
Find and lock a cheap rate (October 7, 2021)
Important information about current mortgage rates
Here are some things you need to know:
Usually mortgage rates go up when the economy is doing well and go down when the economy is in trouble. But there are exceptions. Reading & # 39;How Mortgage Rates Are Determined and Why You Should Care About It
Only “top notch” borrowers (with great credit scores, high down payments, and very healthy finances) will get the extremely low mortgage rates you see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily price action – though they usually all follow the broader trend over time
When the daily price changes are small, some lenders adjust closing costs and leave their price lists unchanged
The refinancing rates are usually close to those for purchases. And a recent regulatory change has closed a pre-existing loophole
So there is a lot going on here. And no one can claim to know for sure what will happen to mortgage rates in the coming hours, days, weeks, or months.
Are mortgage and refinancing rates rising or falling?
today and so forth
There is every reason to believe that Friday's official employment report for September will affect mortgage rates. The markets are sensitive even to the routine edition of this report. But this one is even more important.
Because the Federal Reserve has signaled that it will begin "scaling back" certain programs from November 3rd, unless that report is terrible. And one of those programs is the one that kept mortgage rates artificially low for the past 18 months. Without continued support from the Fed, these rates are very likely to rise.
"Meteor" debt ceiling
Meanwhile, Congress continues to argue over the looming debt crisis. If that cap is not raised by October 18, the United States will default on its debt, which would be unique in its history. It's also likely uniquely harmful.
And yesterday the President compared such defaults to a "meteor that will crash into our economy". He could have further noted that, just like a real large meteor hitting Earth, the consequences would be global.
Few economists and Wall Street analysts consider the President's remark to be an exaggeration. Nobody can calculate what economic damage a failure could cause. But practically every expert is convinced that it will be somewhere beyond seriousness and only this side of apocalyptic.
And a very likely victim would be low mortgage rates. U.S. defaults (I can't believe I'm writing this in a less than theoretical context) would almost certainly add significantly to the cost of all forms of borrowing, including new mortgage rates.
Importantly, while October 18th is the likely date for the first outages, it is important that the cap is raised well in advance. The last time Congress made policy on them was in 2013. And while lawmakers brought it up before this year's deadline, the mere fact that they allowed the possibility of appearing real resulted in the country's credit rating being reduced and the cost of borrowing increased.
Other threats to low interest rates
The Fed and the debt ceiling are likely the biggest potential drivers of higher mortgage rates. But they are far from alone. Here are two more:
Persistent inflation – Higher inflation almost always leads to higher mortgage and other interest rates. And these numbers have been warming up longer than many have predicted
Improving COVID-19 Infection Rates – Investors are happy with low mortgage rates because they fear the economic consequences of the pandemic. But the infection rates have been falling since mid-September
Of course, it is always possible that a major disaster strikes that will push mortgage rates down again. But that seems far less likely than the action of the frightening forces that currently seem geared to propel them higher.
For more information, see the weekend edition of this series of daily articles from last Saturday.
The general trend in mortgage rates was clearly declining for much of 2020. And according to Freddie Mac, a new weekly all-time low was hit 16 times in the past year.
The latest weekly record low was hit on January 7th at 2.65% for 30-year fixed-rate mortgages. But then the trend was reversed and interest rates rose moderately.
However, as of April, these increases have been largely replaced by decreases, albeit typically small. More recently, we've had a couple of months with these courses barely moving. But unfortunately September brought some strong climbs.
Freddies 30. September Report gives this weekly average for 30-year fixed-rate mortgages at 3.01% (with 0.7 fees and points), high from 2.88% the previous week. Personally, I am surprised that the increase was so modest because other sources suggest a stronger one.
Expert predictions for mortgage rates
Looking ahead, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) each have a team of economists devoted to monitoring and forecasting developments in the economy, real estate and mortgage rates.
And here are their current interest 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 apply to 30-year fixed-rate mortgages. Fannies were updated on September 20th and the MBAs updated on September 22nd. But Freddies were last updated on July 15th as these numbers are now only released quarterly. And his forecast looks seriously stale.
Q3 / 21
Q4 / 21
Q1 / 22
Q2 / 22
However, with so many imponderables, all of the current predictions can be even more speculative than usual.
All of these predictions anticipate higher mortgage rates soon or soon. But the differences between the forecasters are stark. And Fannie may not be involved in curbing Federal Reserve mortgage support while Freddie and the MBA do. Or maybe Fannie thinks the tapering will have little effect.
Find your lowest price today
Some lenders have been terrified by the pandemic. And they are limiting their offerings to vanilla-flavored mortgages and refinancing.
But others remain brave. And you can still probably find the refinance, investment mortgage, or jumbo loan you want. All you have to do is look around.
But of course, no matter what type of mortgage you want, you should compare widely. As a federal regulator, the Consumer Financial Protection Bureau says:
Shopping for your mortgage has the potential to result in real savings. It may not sound like much, but if you save a quarter point on interest on your mortgage, you will save thousands of dollars over the life of your loan.
Confirm your new plan (October 7, 2021)
Mortgage rate methodology
The mortgage reports receive daily interest rates based on selected criteria from multiple credit partners. We'll find an average interest rate and an APR for each type of loan shown on our chart. Since we average a range of prices, this will give you a better idea of what you might find in the market. In addition, we determine average interest rates for the same types of credit. Example: FHA fixed with FHA fixed. The end result is a good snapshot of the daily rates and how they change over time.