Today’s mortgage and refinance rates 

Average mortgage rates nudged lower yesterday. And they’re now equaling their lowest level in the last month.

However, there were signs this morning that this happy situation may not last. And mortgage rates today look likely to rise, probably moderately.

Find and lock a low rate (Jul 9th, 2021)

Current mortgage and refinance rates 

Find and lock a low rate (Jul 9th, 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?

If you’re still floating, you need to weigh the likely risks and rewards of doing so. And those have changed over the last few days as markets have responded to economic news in unexpected ways (more below).

Personally, I still think higher mortgage rates in future weeks are more likely than further significant falls. But I’m less confident about that than I was earlier in the week. So I wouldn’t blame you if you’d prefer to wait and see — while noting you may be in for some pain today. Just be ready to lock if you suddenly need to.

Still, my personal rate lock recommendations must 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

However, 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.

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

Yesterday, I promised to let you know if I came across credible theories for why markets shrugged off — indeed, acted perversely in response to — the Federal Reserve’s publication of the minutes of the last meeting of its key policy body, the Federal Open Market Committee (FOMC).

Well, if there’s any consensus, it’s that they found something else bigger to worry about. And that was the possible implications of the COVID-19 pandemic for the global economy. Other, related, concerns include supply chain bottlenecks hampering productivity and an apparent slowing in China’s growth.

Of course, there are good grounds to fear the coronavirus. For example, the Delta variant is proving more infectious and damaging than previous strains. And there’s always the possibility of an Epsilon variant emerging that could be even worse.

Meanwhile, yesterday, the global number of known cases reached 4 million. Given the scarcity of tests in many parts of the world, that’s likely to be a grotesque underestimate.

And, in an interview published in today’s Financial Times, president of the Federal Reserve Bank of San Francisco Mary Daly said:

I think one of the biggest risks to our global growth, going forward, is that we prematurely declare victory on COVID-19.

It may be that markets beat her to that conclusion. And that’s why mortgage rates have tumbled over the last few days. However, it’s hard to spot the event or news item that created such an extreme and sudden shift in sentiment.

Taper tantrum still a real danger

In the same FT interview, Ms. Daly said, “We’re ready to taper at the appropriate time.” And that the Fed would wait to see the effects of tapering before moving on to hiking its interest rates.

That might yet mean sharply higher mortgage rates. Because the Fed tried to “taper” (gradually reduce) its asset purchases in 2013. Then, as now, it was buying mortgage-backed securities (MBSs) by the boatload, thus keeping mortgage rates artificially low. And, when it signaled that it would taper those purchases, mortgage rates rose sharply and suddenly within what came to be called a “taper tantrum.”

Lower mortgage rates remain possible

Of course, if there really were a resurgence in COVID-19 that was sufficient to undermine the US and global economic recoveries, there’d be no need for the Fed to taper anything. And mortgage rates would fall, perhaps to new all-time lows. But that would also likely trigger a recession or even depression. None of us wants that.

How likely is that? Nobody knows for sure. But, right now, markets seem to be treating the threat seriously. Of course, they may change their collective mind soon, perhaps very soon.

Mortgage rates and inflation: Why are rates going up?

For more background, read Saturday’s weekend edition of this column, which has more space for in-depth analysis.

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 and since, though only small ones. Freddie’s July 8 report puts that weekly average at 2.9% (with 0.6 fees and points), down from the previous week’s 2.98%.

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. Fannie’s were updated on June 16 and the MBA’s on June 18. Freddie’s forecast is dated April 14. But it now updates only quarterly. So its numbers are looking stale.

Forecaster	Q2/21	Q3/21	Q4/21	Q1/22
Fannie Mae	3.0%	3.0%	3.2%	3.2%
Freddie Mac	3.2%	3.3%	3.4%	3.5%
MBA	3.0%	3.2%	3.5%	3.7%

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

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 (Jul 9th, 2021)

Mortgage rate methodology