Today’s mortgage and refinance rates 

Average mortgage rates rose appreciably yesterday. And falls and rises over the last week have more or less canceled each other out.

Unfortunately, mortgage rates today may increase again. This morning’s consumer price index inflamed existing fears of future inflation.

Find and lock a low rate (May 12th, 2021)

Current mortgage and refinance rates 

Find and lock a low rate (May 12th, 2021)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

Yesterday’s rise won’t have come as a surprise to regular readers. I’ve been warning they could bounce back from Friday’s fall.

Was Tuesday’s rate increase the beginning of the consistent rises I’ve been predicting for weeks? It may be. But we’ll have to wait to see. For myself, I wouldn’t take chances.

So my personal rate lock recommendations 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

But I don’t claim perfect foresight. And your personal analysis could turn out to be as good as mine — or better. So you might choose to be guided by your instincts and your personal tolerance for risk.

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 Treasurys rose to 1.68% from 1.63% (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
• Major stock indexes were again lower on 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 happens when indexes are lower
• Oil prices jumped to $66.13 from $64.37 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices increased to $1,834 from $1,822 an ounce. (Neutral for mortgage rates*.) In general, it’s 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 — held steady at 45 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

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, so far mortgage rates today look likely to move higher. And be aware that intraday swings (when rates change direction during the day) are a common feature right now.

Find and lock a low rate (May 12th, 2021)

Important notes on today’s mortgage rates

Here are some things you need to know:

1. 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
2. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
3. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
5. Refinance rates are typically close to those for purchases. But some types of refinances are higher following a regulatory change

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks, or months.

Are mortgage and refinance rates rising or falling?

Today and soon

So what happened yesterday? The rise in mortgage rates was a result of a combination of the two drivers I highlighted that morning — and previously. Namely, a fear of future inflation plus supply-chain bottlenecks.

The CNN Business Nightcap e-newsletter summed it up well:

Investors retreated from stocks Tuesday, scared off by what they’re seeing in the real world: Supply chain disruptions are exacerbating shortages of gas, lumber, steel, computer chips, you name it. That means prices are going up, and nothing scares investors right now more than the I-word ( ). Fun game: Drop the I-word in the middle of a clam bake in the Hamptons on Memorial Day and watch the finance bros weep into their White Claws. 

— CNN Business Nightcap, May 11, 2021

This morning’s consumer price index came in at +0.8% for the month of April. And that adds up to an annual rise of 4.2%, the highest since mid-2008. Investors, already spooked by inflation fears, reacted as badly as you’d expect.

With luck, supply-chain issues will ease. Some of them have been made worse by one-time events, such as the ship stuck in the Suez Canal in March and the hacking of the Colonial pipeline last week. And others may be down to pandemic problems with foreign suppliers.

So it’s not clear yet that mortgage rates will continue to rise in a sustained way. But it’s a real possibility.

For more background, check out our latest weekend edition of this report.

Recently

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 last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But then the trend reversed and rates rose.

However, those rises were mostly replaced by falls in April, though those have moderated since the middle of that month. Freddie’s May 6 report puts that weekly average at 2.96% (with 0.6 fees and points), down from the previous week’s 2.98%. But note how small these weekly movements now are.

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 rates forecasts for the remaining quarters of 2021 (Q2/21, Q3/21, Q4/21) and the first quarter of 2022 (Q1/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Freddie’s were updated on April 14, Fannie’s on April 12 and the MBA’s on April 22.

Forecaster	Q2/21	Q3/21	Q4/21	Q1/22
Fannie Mae	3.2%	3.3%	3.4%	3.5%
Freddie Mac	3.2%	3.3%	3.4%	3.5%
MBA	3.4%	3.6%	3.7%	3.9%

However, given so many unknowables, the current crop of forecasts might be even more speculative than usual. But, if any of those forecasts are to be proved right, rates will at some point have to rise quickly during the remaining seven weeks of the current quarter (Q2).

Find your lowest rate today

Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping 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.

Verify your new rate (May 12th, 2021)

Mortgage rate methodology