Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday. And conventional loans today start at 2.75% (2.75% APR) for a 30-year, fixed-rate mortgage. 

A fall looked unlikely yesterday morning. But, during the day, President Donald Trump said he was calling off talks aimed at agreeing a new stimulus package. And hope for such a package was one of the things sustaining investors’ optimism.

Find and lock a low rate (Oct 7th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Oct 7th, 2020)

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?

The uncertainty dogging markets could be seen in high definition yesterday.

The Dow was jogging along nicely, showing appreciable gains. Then the president tweeted that he was calling off talks with the House speaker over a stimulus measure. And the index plummeted 600 points. It closed the day down 375.88.

Later, the president said he’d be willing to sign a “skinny” stimulus bill. And that’s caused a bounce in markets this morning.

We may well see more of this sort of volatility between now and Election Day — and possibly after it, if the result is disputed.Providing the news continues to be bad for the economy and markets, that could see mortgage rates fall, possibly even to a new low.

But volatility cuts both ways. And there’s a real risk of those rates rising.

Do you have the stomach for such a ride? If not, you may want to lock the next time rates dip appreciably (assuming there is a next time before you have to close).

But, if you like a wager, you could buckle up and hope for some worthwhile rewards. Just recognize the risks.

Meanwhile, my personal recommendations remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

But, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your personal tolerance for risk.

Market data affecting today’s mortgage rates 

Here’s the state of play this morning at about 9:50 a.m. (ET). The data, compared with about the same time yesterday morning, were:

• The yield on 10-year Treasurys inched up to 0.78% from 0.77%. (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 higher on 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 happens when indexes are lower
• Oil prices dipped to $39.80 from $40.70 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
• Gold prices nudged lower to $1,888 from $1,924 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 46 from 53 out of a possible 100 points. (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

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. The Fed is now a huge player and some days can overwhelm investor sentiment.

So use markets only as a rough guide. They have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. Today they’re looking worse for mortgage rates. Investors may have been encouraged by the president’s tweets during the evening that a “skinny” stimulus may still be possible. Or they may be discounting the whole issue, banking on a stimulus after the election.

Find and lock a low rate (Oct 7th, 2020)

Important notes on today’s mortgage rates

Here are some things you need to know:

1. The Fed’s ongoing interventions in the mortgage market (at least $1 trillion; some say nearly $2 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. So expect short-term rises as well as falls. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
2. 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
3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
4. Lenders vary. Yours may or may not follow the crowd when it comes to rate movements — though they all usually follow the wider trend over time
5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
6. At times of high demand, lenders can push up rates as a way of managing their workflow. Neither markets nor the Fed can help when that happens

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?

Over the last few months, the overall trend for mortgage rates has clearly been downward. A new all-time low was set early in August and we’ve gotten close to others since. Still, a new one remains a real possibility.

But such a new low is far from a given. Indeed, some recent market movements suggest it could be a way off. And that limited rises could push rates higher, at least until the election and perhaps beyond.

It all depends on countless variables, most of which are unknowable. So don’t listen to anyone who claims to be able to predict with any certainty where mortgage rates will go next.

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 last quarter of 2020 (Q4/20) and the first three of 2021 (Q1/21, Q2/21 and Q3/21).

Note that Fannie’s (published Sept. 15) and the MBA’s (Sept. 21) are updated monthly. However, Freddie’s are now published quarterly. The last was released on June 8 and the next was, presumably, due in September.

But, as of the morning of Oct. 7, there’s still no sign of it. So Freddie’s feel stale. Did anyone remember to turn the lights off?

The numbers in the table below are for 30-year, fixed-rate mortgages:

Forecaster	Q4/20	Q1/21	Q2/21	Q3/21
Fannie Mae	2.8%	2.8%	2.7%	2.7%
Freddie Mac	3.3%	3.2%	3.2%	3.2%
MBA	3.1%	3.1%	3.2%	3.2%

So expectations vary considerably. You pays yer money …

Find your lowest rate today

Everyone — from federal regulators to personal finance gurus — agrees that shopping around for your new mortgage or refinance is important. You could save thousands over just a few years by getting quotes from multiple lenders. And more, if you keep your mortgage for a long time or have a large loan.

But you’ve rarely had more to gain by shopping around than you do now. The mortgage market is currently very messy. And some lenders are offering appreciably lower rates than others. Worse, some are making it harder to get any mortgage at all if you want a cash-out refinance, a loan for an investment property, a jumbo loan or if your credit score is damaged.

So start shopping around soon for your new mortgage or refinance. You’re most likely to find a great deal on the type of loan you want if you spread your net widely.

Verify your new rate (Oct 7th, 2020)

Mortgage rate methodology