Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday. The fall was the smallest that can be measured. But was welcome nonetheless.

First thing this morning, key markets are looking quiet again. And we may see a replay of the last few days. If so, mortgage rates today may nudge lower or hold steady.

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?

Recent consistent falls are matched by the consistent rises that immediately preceded them. And it’s much too soon to draw conclusions about the overall direction of mortgage rates.

Things would have to go seriously wrong with the pandemic and vaccine rollout for these rates not to start to rise later in the year, once the economy starts to recover. But that could be several months away.

In the meantime, there are no reliable guides as to where these rates will head. So I’d advise caution. And, for now, my personal rate lock recommendations, which are little better than hunches, 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

Still, 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 gut 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 about the same time yesterday morning, were:

• The yield on 10-year Treasurys edged down to 1.09% from 1.11%. (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 lower on 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 happens when indexes are lower
• Oil prices moved down to $51.99 from $53.07 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 fell to $1,839 from $1,865 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 67 from 70 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. 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. But, with that caveat, so far mortgage rates today look likely to move a little lower.

Find and lock a low rate (Jan 23rd, 2021)

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 (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. 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 daily 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. 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

I’m expecting mortgage rates to nudge lower today. But, as always, that could change as the day progresses.

It’s highly likely that federal spending on pandemic relief and other measures will try to push these rates higher. This morning’s Financial Times suggested about the Biden administration’s proposals, ” … the trillions of dollars of stimulus packages will surely result in inflation.” And that’s a sure sign of higher rates.

But that upward pressure is being counteracted by the economic damage the pandemic is wreaking. Poorly performing economies walk hand-in-hand with lower rates as surely as inflation leads to higher ones.

Unfortunately, there’s currently no way to predict which of these conflicting forces will win. True, it’s likely we’ll see higher rates once the pandemic fades. But we have still no idea when that will be. Believe us, we can’t wait to get back to being able to make more confident forecasts.

Recently

Over the last several months, the overall trend for mortgage rates has clearly been downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent such record occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates are now some way above the all-time low. In Freddie’s Jan 21 report, that weekly average was 2.77%.

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 each quarter of 2021 (Q1/21, Q2/21, Q3/21 and Q4/21).

Fannie’s were released on Jan. 15, Freddie’s on Jan. 14 and the MBA’s on Jan. 20. The numbers in the table below are for 30-year, fixed-rate mortgages:

But, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.

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.

Mortgage rate methodology