Mortgage

Mortgage and refinance charges at the moment, Might 9, 2022

Today’s mortgage and refinance rates

Average mortgage rates rose only a little last Friday. But, over the whole week, they climbed appreciably. And 2022’s clear upward trend appears to remain intact.

So far this morning, it is looking as if mortgage rates today might move higher. However, there’s plenty of volatility so that could easily change as the hours pass.

Current mortgage and refinance rates

Program
Mortgage Rate
APR*
Change

Conventional 30 year fixed
5.694%
5.718%
+0.01%

Conventional 15 year fixed
4.905%
4.937%
Unchanged

Conventional 20 year fixed
5.703%
5.743%
Unchanged

Conventional 10 year fixed
4.702%
4.771%
+0.04%

30 year fixed FHA
5.55%
6.345%
Unchanged

15 year fixed FHA
5.069%
5.361%
Unchanged

30 year fixed VA
5.335%
5.553%
+0.03%

15 year fixed VA
4.75%
5.094%
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?

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.

This time last week, I was hoping the Federal Reserve’s announcements that Wednesday would bring new stability to mortgage rates, and perhaps slow increases. But there’s little sign of that so far.

Of course, nobody can tell the future. And all I can do is try to identify the future scenarios that seem to me most likely to come to pass. Unfortunately, on that basis, I can summon little optimism for mortgage rates over the coming months. My remaining hope is that those rates continue higher but move more slowly than recently.

So, my personal rate lock recommendations for the longer term remain:

LOCK if closing in 7 daysLOCK if closing in 15 daysLOCK if closing in 30 daysLOCK if closing in 45 daysLOCK 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 last Friday, were:

The yield on 10-year Treasury notes nudged higher to 3.12% from 3.08%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yieldsMajor stock indexes were lower soon after opening. (Good 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 relationshipOil prices dropped to $106.90 from $111.84 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 $1,863 from $1,877 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 lowerCNN Business Fear & Greed index — held steady at 28 out of 100. (Neutral 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 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 advertisedLenders 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 timeWhen daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the sameRefinance 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?

Last Wednesday, the Fed delivered a degree of certainty over future general interest rates and its running down of its holdings of mortgage-backed securities (MBSs — the type of bond that largely determines mortgage rates).

Markets hate uncertainty, and you might have expected that to slow the pace at which mortgage rates would rise. But no. So far, at least, mortgage rates have been barely affected by the Fed’s new information.

It’s all about inflation

What’s moving them higher now is likely to be a different sort of uncertainty: that concerning inflation. And you can see why. MBSs are fixed-income bonds. And if you buy one yielding 3.2% (roughly right at the moment) at a time when inflation is running at 8.5%, you know a real-terms (after-inflation) loss is built into your investment.

We’ll know more about April’s inflation later this week when three reports are due to be published, including the consumer price index on Wednesday. But those will tell us what happened last month. And they’ll provide only clues about the future.

The main drivers of inflation today are probably:

Russia’s war in Ukraine, which is pushing up energy, food and metals pricesChina’s continuing COVID-19 lockdowns (yes, they’re still happening)Delicate global supply chains continuing to struggle to return to normal after pandemic disruptions

As long as those remain problems, investors really have minimal certainty about future inflation. And mortgage rates might therefore continue to rise.

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

Recent trends

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 shooting up since the start of 2022.

Freddie’s May 5 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.27% (with 0.9 fees and points), up from the previous week’s 5.10%.

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 Apr. 19, Freddie’s on Apr. 18, and the MBA’s on Apr. 13.

ForecasterQ2/22Q3/22Q4/22Q1/23Fannie Mae4.6%4.5% 4.5%4.5%Freddie Mac4.8%4.8% 5.0%5.0%MBA4.7%4.8% 4.8%4.8%

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. 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.

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