Today’s mortgage and refinance rates 

Average mortgage rates inched lower again yesterday. But the move was so small it was barely perceptible. And conventional loans today start at 2.875% (2.875% APR) for a 30-year, fixed-rate mortgage. 

Current mortgage and refinance rates 

Find and lock a low rate (Sep 24th, 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?

In yesterday’s version of this article, we reiterated what we’ve been saying for a while:

1. Mortgage rates have been moving very little in recent months
2. The overall direction of travel has been gently downward — punctuated by small, brief spikes
3. The risk of unexpected volatility never goes away
4. The most likely source of such volatility is news about the pandemic

Now, with 39 days to the presidential (and general) election, we should probably add that as another potential source of volatility.

Traditionally, markets can be skittish before these events. Investors usually favor Republican candidates because of their pro-business, low-tax, light-regulation agendas. But it’s not always like that. And other factors may weigh this time.

Of course, markets usually settle down soon after each election, whoever wins. But there is an added danger now: the possibility of a disputed result. Investors hate uncertainty and a long, drawn-out court drama is the last thing they want. Not that one would necessarily disadvantage mortgage borrowers.

For now, my personal recommendations stand. But I may revisit them as the clock ticks down to Nov. 3.

• 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

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 down to 0.67% from 0.68%. (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. (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 edged lower to $39.73 from $39.96 a barrel. (Neutral for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
• Gold prices dipped to $1,856 from $1,889 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 tumbled to 41 from 55 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 Fed’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 a little better for mortgage rates. Disappointing weekly jobless claims added to a gloomy mood as investors’ hopes for further federal stimulus measures fade.

Find and lock a low rate (Sep 24th, 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. But check out what 10 experts think could happen between now and the end of this year:

Mortgage rate and housing market predictions for late-2020

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.

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.

Expert mortgage rate forecasts

And here are their current rates forecasts for the last two quarters of 2020 (Q3/20 and Q4/20) and the first two of 2021 (Q1/21 and Q2/21).

Note that Fannie’s (published Sept. 15) and the MBA’s (Sept. 21) are updated monthly. However, Freddie’s are published quarterly, with the last released in June and the next due any day. So Freddie’s currently feel stale. The numbers in the table below are for 30-year, fixed-rate mortgages:

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.

Mortgage rate methodology