Today's mortgage and refinancing rates
Average mortgage rates were stable yesterday. They changed direction once more during the day.
Mortgage rates are unpredictable today. This is less of a cop-out than it sounds. Because the Chairman of the Federal Reserve is starting a keynote speech as this report is published. And what he says could cause ripples in the markets that drive those rates. So watch out for news reports on the content of this speech. And read on for more details.
Find and lock a cheap rate (August 27, 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 (August 27, 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?
Keep an eye out for news on what the Fed chairman said in his speech this morning. It is quite possible that he will not say anything new and that mortgage rates will remain unchanged. But it could give (or even reveal) the timing of the central bank's throttling of its asset purchase program. More on this below.
My basic position for locking or floating your course has not changed. I assume the risks of floating outweigh the likely benefits. And I would finish now. But you could legitimately take the opposite view, especially if it turns out that this morning's speech will not affect mortgage rates.
My personal rate lock recommendations remain for the time being:
LOCK when close in 7th DaysLOCK when close in fifteen DaysLOCK when close in 30th DaysHOVER when close in 45 DaysHOVER 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 decreased from 1.36% to 1.34%. (Good 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 rose to $ 68.76 from $ 67.30 a barrel. (Bad for mortgage rates *.) Energy prices play a huge role in creating inflation and also indicate future economic activity.
Gold prices Inches up to $ 1,790 of $ 1,787 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 – increased from 47 to 50 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 restriction so far Mortgage rates are unpredictable today. Most days, however, you need to be aware that “intraday swings” (when prices change direction during the day) are a common feature these days.
Find and lock a cheap rate (August 27, 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
All week I've been listening to Fed chief Jerome Powell's speech, due to start this morning at 10 a.m. ET. Because it could change everything. But it can't change anything.
Regular readers will know most of what there is to know about tapering. The Fed is currently keeping mortgage rates artificially low by buying huge amounts of mortgage-backed securities (MBSs), a type of bond that is by far the most influential factor in driving those rates.
How big are these quantities? Well, on August 25, the Fed owned MBS worth $ 2.43 trillion. Yes, that's trillions. Hell, that's more than Jeff Bezos makes in a whole week!
But these purchases should always be only a temporary measure necessary to prop up the economy during the pandemic. And the Fed has been signaling for some time that it intends to slow down its purchases and then stop ("sneak out").
The problem for the Fed is how to taper without freaking out the markets. The last time it announced it was phasing out a similar program in 2013, investors were deeply dissatisfied and had what would later be referred to as the "taper tantrum." And as a result, mortgage rates skyrocketed.
Worse, those prices skyrocketed immediately after the announcement and months before the actual reduction began.
Understandably, the Fed is trying a different tactic this time. It has worked to acclimate (or soften) the markets by slowly providing incrementally clearer information about the possible timing of the tapering. And it has encouraged its top officials to express their own opinions publicly so that the final announcement is less shocking.
For example, yesterday the President of the St. Louis Fed, James Bullard, suggested that the Fed act aggressively. And he wanted the entire tapering process to be completed by March 2022.
The big speech
Much more important than the series of personal opinions of Mr. Bullard and his colleagues is anything Fed Chairman Powell says. And that's why finance makers and shakers around the world will be paying close attention today.
There's a good chance Mr. Powell won't say anything new this morning. It is more likely that he will provide further guidance on the schedule. And there is a remote possibility that he will reveal the whole scheme.
If he doesn't say anything new, mortgage rates may stay the same or even decrease slightly. If he reveals the schedule, they'll likely go up. But if he gives further clues, they could go either way. That depends on how broad the clues are and how much they change investor expectations.
You can see why I say that mortgage rates today are unpredictable.
For more background information, see Saturday's weekend edition of this column. And the longer-term forecast of my colleague Tim Lucas, Mortgage Rate Forecast and Trends: Will rates fall in September 2021?
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 most recent weekly record low was recorded on January 7th when it was 2.65% for 30-year fixed-rate mortgages. But then the trend was reversed and interest rates rose.
However, these increases have been largely replaced by decreases since April, albeit typically small. Freddie's August 26 report builds on this weekly average 2.87% (with 0.6 fees and points), high compared to 2.86% the previous week.
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 and the MBAs were updated on August 19th. However, Freddies was last updated on July 15th as these numbers are now only released quarterly. And his prognosis is already looking stale.
Q3 / 21
Q4 / 21
Q1 / 22
Q2 / 22
However, with so many imponderables, all of the current forecasts could be even more speculative than usual.
All of these predictions anticipate higher mortgage rates 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.
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 only a quarter point in interest on your mortgage, you will save thousands of dollars over the life of your loan.
Confirm your new price (August 27, 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.