Today’s mortgage and refinance rates 

Average mortgage rates fell appreciably yesterday. They’re still not as low as they were immediately before the mid-June spike. But they’re now very close.

It’s a funny (peculiar, not ha-ha) morning in markets. And mortgage rates today may continue their fall. But strange markets are uncertain ones.

Find and lock a low rate (Jul 8th, 2021)

Current mortgage and refinance rates 

Find and lock a low rate (Jul 8th, 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?

Those who kept floating yesterday have something to celebrate. And mortgage rates are now close to the lowest end of the tight range in which they’ve been stuck for months.

That’s great. But even seasoned analysts are puzzled by yesterday’s fall (see below). And there’s no guarantee it will hold for long. Meanwhile, of course, most expert observers are expecting mortgage rates to rise soon. So 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’s minutes of the last meeting of the Federal Reserve’s Federal Open Market Committee (FOMC) said what I feared. The FOMC decides the Fed’s interest rates and monetary policy. And that policy includes asset purchases. Currently, that policy includes buying $40 billion a month of mortgage-backed securities. And that’s keeping mortgage rates artificially low.

The minutes showed the FOMC positioning itself to slow all its asset purchases. Reuters explained yesterday:

In minutes that reflected a divided Fed wrestling with new inflation risks but still relatively high unemployment, “various participants” at the June 15-16 meeting felt conditions for reducing the central bank’s asset purchases would be “met somewhat earlier than they had anticipated.”

— Reuters, “Fed keen to be ‘well positioned’ to act on inflation, other risks, minutes show,” July 7, 2021

Egg on my face

I thought the Fed contemplating cutting asset purchases (and perhaps hiking its rates) would cause mortgage rates to rise. So I have egg on my face this morning.

But, in my defense, so did many others. MarketWatch reported yesterday:

Thus far yields on the longer end of the yield curve have skidded lower, puzzling some analysts because concerns about inflation persisting and eventually higher rates are theoretically bearish for bonds.

— MarketWatch, “10-year Treasury yield deepens slide to February lows as Fed signals readiness to taper,” July 7, 2021

And MarketWatch made clear in the same article that mortgage-backed securities were very much in some committee members’ sights. It said: “Some Fed members advocated for beginning tapering by reducing the Fed’s monthly purchase of $40 billion in mortgage-backed securities, given the view that the red-hot housing market doesn’t need the support. Other members believe that reductions should be done across the board.”

Why the fall?

To be honest, I remain mystified by why mortgage rates fell yesterday instead of rising. We all know that markets sometimes act unpredictably. But that seemed positively perverse.

The last time the Fed had an asset purchasing program and signaled that it would shortly gradually reduce (“taper”) it was in 2013. And mortgage rates shot up then within what came to be known as a Taper Tantrum.

Maybe somebody has a rational explanation for what happened yesterday. And, if I come across it, I’ll report it tomorrow or as soon as possible.

But, in the meantime, I can only suggest that you treat yesterday’s movements with caution. Maybe investors will have second thoughts once they fully digest the implications of the Fed’s minutes.

Although, first thing this morning, it was looking unlikely that would happen today.

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 — Updated today

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 beyond, 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 8th, 2021)

Mortgage rate methodology