Today’s mortgage and refinance rates 

Average mortgage rates moved higher again yesterday. Let’s not get carried away yet. They’re still extraordinarily low. And you have to go back only to July 16 to find higher ones, based on Mortgage News Daily’s figures.

Market movements first thing this morning suggested mortgage rates today might edge higher or hold steady. But yesterday showed that such early indicators aren’t always reliable.

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?

Yesterday morning, unchanged or slightly lower mortgage rates looked the more likely scenarios for that day. But they ended up rising moderately. That’s a measure of the uncertainty at the moment.

There is a real possibility of those rates continuing upward for an extended period. Of course, nobody can be sure. But the momentum feels to be going in that direction. So, if you’re at all cautious, you might choose to lock your rate now, regardless of your closing date. You’ll still get an amazingly good deal.

I’m leaving my personal rate lock recommendations where they are today. But I’ll change them (to Lock across the board) later in the week if that momentum appears to be sustained:

• 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 yesterday, were:

• The yield on 10-year Treasury notes rose to 1.32% from 1.28%. (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 modestly higher shortly after opening. (Bad 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 increased to $67.55 from $66.22 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 to $1,724 from $1,743 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 — climbed to 40 from 36 out of 100. (Bad 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 up or remain unchanged. 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 10th, 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

Yesterday’s figures for job openings were good. And markets are now waiting for tomorrow’s consumer price index and Thursday’s producer price index, both of which measure inflation.

Investors have two focuses at the moment: employment and inflation. And if those indexes come in warm, that could push mortgage rates higher. That’s partly because it will pile pressure on the Federal Reserve to end its stimulus program earlier than planned.

Tapering — yet again

That stimulus program includes the Fed buying quantities of assets, including mortgage-backed securities (MBSs), a type of bond that directly determines mortgage rates. And those purchases are currently keeping mortgage rates artificially low.

In the latest weekend edition of this column, I named two top Fed officials who had publicly advocated “tapering” (gradually reducing) those purchases of MBSs. Well, yesterday, they were joined by two others. And the four comprise:

• Federal Reserve Vice Chair Richard H. Clarida
• Federal Reserve Gov. Christopher Waller
• Atlanta Federal Reserve Bank President Raphael Bostic
• Richmond Fed President Tom Barkin

Sept. a real possibility

Here is an extract from yesterday’s Reuters report concerning the remarks of the last two of those:

Two Federal Reserve officials said on Monday that the U.S. economy is growing rapidly and that while the labor market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.

Atlanta Federal Reserve Bank President Raphael Bostic said he is eyeing the fourth quarter for the start of a bond-purchase taper but is open to an even earlier start if the job market keeps up its recent torrid pace of improvement. Moreover, he and Richmond Fed President Tom Barkin both said they believe inflation has already achieved the Fed’s 2% threshold, according to their separate assessments. That is one of two requirements to be met before rate hikes can be considered.

If Mr. Bostic is open to announcing a taper before the fourth (Oct.-Dec.) quarter, that would probably mean doing so next month, most likely on Sept. 22, immediately after the next meeting of the Fed’s monetary policy body, the Federal Open Market Committee. And Mr. Waller has also suggested a Sept. date. 

Nothing’s certain

Although that roll call is impressive, there will likely be other voices within the Fed that will argue that Sept. is too soon to announce tapering. So we can’t be sure whether things will change then.

But the Fed is under growing pressure to act soon. Many suggest that its MBS purchases are fueling home price inflation by depressing mortgage rates. So a Sept. announcement is a real possibility.

And, if enough investors believe that such an announcement is that close, that should put its own upward pressure on mortgage rates. Indeed, we might already be seeing that pressure in action.

But there are plenty of things that could happen in the intervening period that could allow the Fed to postpone tapering. Perhaps this month’s employment situation report (published in early Sept.) won’t be as great as the last one. Or maybe inflation will cool. Or it’s possible that the current wave of the Delta variant will prove more economically damaging than it currently looks.

So, for now, we can only weigh probabilities. And lock or continue to float our mortgage rates on the basis of our own assessments and our personal appetites for risk.

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. And this Thursday’s report will likely show an appreciable rise.

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 10th, 2021)

Mortgage rate methodology