Today's mortgage and refinancing rates
Average mortgage rates fell by a significant amount yesterday. But they're still a long way from regaining the ground they've lost so far this year. Yet they remain at levels that would have been unthinkably low before the pandemic.
Once again, the markets are signaling this Mortgage rates could remain stable or little move today. But we've seen over the past few days how inaccurate these early signs can be.
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Current mortgage and refinancing rates
Effective interest rate*
Conventional 30 years fixed
Conventional 15 year fixed
Conventional 20 years fixed
Conventional 10 year fixed
30 year solid FHA
15 year solid FHA
5/1 ARM FHA
30 years solid VA
15 years solid VA
5/1 ARM VA
Prices are provided by our partner network and may not reflect the market. Your tariff may vary. Click here for an individual price offer. See our rate assumptions here.
Should You Lock A Mortgage Rate Today?
I still believe that the last few days of the decline were more of a blip than the start of a longer downtrend. Of course I can be wrong. But I assume that mortgage rates will continue to rise slowly for some time.
Therefore, for now, my personal rate lock recommendations remain:
LOCK when it closes 7 daysLOCK when it closes fifteen daysLOCK when it closes 30 daysLOCK when it closes 45 daysLOCK when it closes 60 days
>Related: 7 tips to get the best refinancing rate
Market data affecting today's mortgage rates
Here's a snapshot of the current status at around 9:50 am ET this morning. The data, compared to around the same time yesterday, was:
the Yield on 10-year treasury bills stable at 1.74%. (Neutral for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular government bond yieldsMajor Stock Indices were higher. (Bad for mortgage rates.) When investors buy stocks, they often sell bonds, pushing down their prices and raising yields and mortgage rates. The opposite can happen when indices are lower. But this is an imperfect relationshipoil prices rose to $82.64 from $82.16 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity gold prices fell from $1,824 an ounce to $1,821. (Neutral for mortgage rates*.) In general, interest rates are better when gold is rising and worse when gold is falling. Gold tends to rise when investors are worried about the economy. And worried investors tend to push rates downCNN Business Fear & Greed Index — Decreased from 66 to 62 from 100. (Good for mortgage interest.) "Greedy" investors push bond prices down (and interest rates up) when they exit the bond market and switch to stocks, while "fearful" investors do the opposite. So lower values are better than higher ones
*A change of less than $20 in gold or 40 cents in oil is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.
Reservations on Markets and Courses
Before the pandemic and Federal Reserve intervention in the mortgage market, you could look at the numbers above and get a pretty good idea of what was going to happen to mortgage rates that day. But that is no longer the case. We still talk on the phone every day. And are mostly right. But our accuracy record won't reach its previous high level until things settle down.
Therefore, use markets only as a rough guide. Because they have to be exceptionally strong or weak to be able to rely on them. But with this caveat Mortgage rates are likely to be unchanged or nearly unchanged today. Note, however, that "intraday swings" (when prices change direction throughout the day) are a common feature these days.
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Important information about today's mortgage interest rates
Here are some things you need to know:
Typically, mortgage rates rise when the economy is doing well and fall when it's troubled. But there are exceptions. Read How Mortgage Rates Are Determined and Why You Should Care. Yours may or may not follow the crowd when it comes to daily interest rate movements – although over time they all usually follow the broader trend. When daily interest rate changes are small, some lenders adjust closing costs and leave their price lists the same as those for purchases.
There's a lot going on at the moment. And no one can claim to know for sure what will happen to mortgage rates in the hours, days, weeks, or months ahead.
Are mortgage and refinancing rates rising or falling?
Mortgage rates have risen sharply so far this year, facilitated only by a two-day decline more recently. I expect they will continue to rise at a more steady pace.
Of course, there will still be inevitable falls. But I think the underlying trend will be an uptrend.
I have said that inflation is one of the main reasons for higher mortgage rates. However, when yesterday's CPI was released and inflation rose to its highest level since 1982, those rates actually fell. And there was an echo of that this morning as markets shrugged off even higher PPI readings. So how come these numbers don't evoke a sharper reaction?
Well, that's mainly because investors believe that such high inflation rates are likely to force the Federal Reserve to increase the pace of its anti-inflation policy. And that could mean more rate hikes this year: probably three or four, starting as early as March.
CNN Business reported this morning that a Bank of America strategist told him, "…rates could be up 1 (percentage point) or more by the end of the year."
Rate hikes could dampen inflation, but they are also likely to hurt the economic recovery. And that's not popular with investors.
Why inflation will ultimately drive up mortgage rates.
Mortgage rates are largely determined by trading in mortgage-backed securities (MBS). And MBS are a type of fixed rate bond.
Suppose you could buy an MBS today that would give you a 2% annual income ("return"). With annual inflation at 7%, you are guaranteed a real loss.
Of course, people will still buy MBS (and government bonds) because they're safe. Should the relatively risky stock market collapse (unlikely, but not inconceivable), your bond investments could be all that stands between you and ruin.
And a safe haven for money does not necessarily have to be the most attractive investment. It's a bit like the old joke about two friends wandering through the woods when they're attacked by a bear. You don't have to outrun the bear. You just have to run away from your buddy.
Likewise, MBS need not outperform all markets. They just have to be more attractive than comparable safe investments. That is why there are still buyers for negative interest rates in parts of Europe.
For a longer look at what's driving mortgage rates, including why markets are bullish on Omicron, read the weekend edition of this daily rates report.
Recent — Updated today
For much of 2020, the overall trend in mortgage rates was clearly down. And according to Freddie Mac, a new weekly all-time low was hit 16 times last year.
The last weekly record low was on Jan. 7 when it was 2.65% for 30-year fixed-rate mortgages.
Since then, the picture has been mixed by extended periods of ups and downs. Unfortunately, the increases have become more pronounced since September, although not consistently.
Freddies 13th January Report puts that weekly average for 30-year fixed rate mortgages at 3.45% (with 0.7 fees and points), high from 3.22% of the previous week.
Mortgage rate forecasts by experts
Looking ahead, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) each have a team of economists dedicated to monitoring and forecasting what will happen to the economy, the real estate sector, and mortgage rates.
And here are their current rate forecasts for the remaining current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).
The figures in the table below refer to 30-year fixed-rate mortgages. Fannies were released on December 20th and the MBAs on December 21st.
Freddie's was released on October 15th. It now only updates its forecasts quarterly. So we might not get another one of these until later this month. And his numbers are already looking stale.
forecasterQ4/21Q1/22Q2/22Q3/22Fannie Mae3.1%3.1%3.2%3.3%Freddie Mac3.2%3.4%3.5%3.6% MBA3.1%3.3%3.5%3.7%
However, with so many unknowns, the entire current crop of forecasts may be even more speculative than usual.
Find your cheapest fare today
You should compare extensively no matter what type of mortgage you want. As the federal regulator, the Consumer Financial Protection Bureau says:
“If you look after your mortgage, you can make real savings. It may not sound like much, however Saving even a quarter point in interest on your mortgage saves you thousands of dollars over the life of your loan.”
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Mortgage interest methodology
Every day, The Mortgage Reports receives interest rates based on selected criteria from multiple lending partners. We get an average interest rate and APR for each loan type shown in our chart. As we average a range of rates, you'll get a better idea of what you might find on the market. In addition, we calculate interest rates for the same types of credit. For example FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.