Today’s mortgage and refinance rates 

Average mortgage rates rose appreciably last Friday. It was the end of a bad week for mortgage rates. But they remain extraordinarily low by any standards.

First thing this morning, market movements were suggesting mortgage rates today might be unchanged or barely changed. But with so much uncertainty, there are no guarantees.

Current mortgage and refinance rates 

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?

Events last week increased the risks of continuing to float your rate. Read on for more details.

That doesn’t necessarily mean rates will continue rising. But they’re more likely to do so now. And anyone who thinks of themselves as cautious or conservative over money might well choose to lock their rate now, regardless of when they’re due to close.

Of course, only you can make that decision. But my personal rate lock recommendations, which changed over the weekend, are:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• LOCK if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT 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.

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 last Friday, were:

• The yield on 10-year Treasury notes inched down to 1.28% from 1.29%. (Good 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 mostly lower shortly after 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 may happen when indexes are lower
• Oil prices tumbled to $66.22 from $69.08 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices fell to $1,743 from $1,771 an ounce. (Bad 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 — fell to 36 from 39 out of 100. (Good 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 hold steady or just inch either side of the neutral line. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find and lock a low rate (Aug 9th, 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. And a recent regulatory change has narrowed a gap that previously existed

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

In the latest weekend edition of this column, I explored the possibility of events last week reversing the recent downward trend in mortgage rates. It is only that: a possibility. And we’ll have to wait to see how things play out in reality.

But it might be that last Friday’s excellent employment situation report changed investors’ attitudes. Before Friday, they could say, “Well, yes. Nearly all the economic data in recent months is pointing to a strong recovery and boom. But look at the employment figures.”

And they might continue to say that. After all, one month’s data are a poor basis for making important decisions. But they’re less likely to. Most importantly, if enough choose to believe that the boom is close to certain, that should bring higher mortgage rates.

This morning, CNN Business’s Before the Bell e-newsletter put it thus:

Yields on benchmark US 10-year bonds moved higher to roughly 1.3% after the jobs report on Friday, their highest level since July 23. Yields have since fallen back a bit. But the addition of 943,000 jobs in the United States is great news for the economy, making it more likely that the Federal Reserve begins to pull back its stimulus earlier than expected. 

The part of its stimulus that the Fed is likely to pull back first involves tapering. And that’s up next.

Tapering

The other big event last week that could change investors’ minds was movement within the Federal Reserve. Two top officials said that early tapering was now likely. But what’s tapering?

Well, it’s a gradual reduction in the purchasing of mortgage-backed securities (MBSs). Right now, the Fed’s buying those bonds at a rate of $40 billion a month. And that’s keeping mortgage rates artificially low.

Before last week, the official line was that tapering would happen only when conditions were right — at some unspecified time in the future. But those two Fed people said things had changed already and that it could happen much sooner than previously implied. One actually named Sept. 22 as the date he’d personally back for a formal announcement.

Once investors are convinced that tapering is imminent, they’re likely to act as if it were already happening. And start to push up mortgage rates. Probably.

What this means for mortgage rates

That “probably” is important. Because, in recent months, investors have thrown out their time-honored playbook. And they’ve been acting in ways that have mystified financial journalists and Wall Street analysts alike.

So nobody can be certain how last week’s events will play out. And we might see mortgage rates resume their previous downward drift.

Or we might look back on last week and see it as the turning point when mortgage rates began moving higher. Nobody knows.

For more background, read Saturday’s weekend edition of this column.

Mortgage rates and inflation: Why are rates going up?

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 since April, though typically small ones. Freddie’s Aug. 5 report puts that weekly average at 2.77% (with 0.6 fees and points), down from the previous week’s 2.80%. But that report didn’t take into account rises on that Wednesday, Thursday and Friday.

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 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 are for 30-year, fixed-rate mortgages. Fannie’s were updated on July 19, Freddie’s on July 15 and the MBA’s on July 21.

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

All these forecasts expect higher mortgage rates soon. But the differences between the forecasters are stark. And it may be that Fannie isn’t building in the Federal Reserve’s tapering of its support for mortgage rates while Freddie and the MBA are.

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 (Aug 9th, 2021)

Mortgage rate methodology