Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday. That was the fifth business day running on which rates have fallen — albeit minutely. And conventional loans today start at 2.75% (2.75% APR) for a 30-year, fixed-rate mortgage. 

We may be due a period of rises soon. There seems little reason to think those will be either sharp or will last long. But such ups and downs are a feature of these rates. Just be grateful the downs have outweighed the ups in recent months — and may continue to do so.

Find and lock a low rate (Sep 29th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Sep 29th, 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?

My hope is that mortgage rates will continue to inch lower, punctuated by occasional spikes. And that currently seems a realistic scenario. However, seriously good news (progress on a vaccine, or a new federal stimulus, say) could change everything in a heartbeat.

Of course, even less spectacularly good news can cause mini-spikes that usually last only a short time.

So, for now, my personal recommendations stand:

• 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

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 lower to 0.65% from 0.66%. (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 modestly 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 fell to $39.94 from $40.23 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 edged up to $1,892 from $1,877 an ounce. (Neutral 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 inched down to 48 from 50 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 OK for mortgage rates. Investors are hoping for federal stimulus measures but recognize time’s running out for those.

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.

That’s partly because the Fed is continuing to buy huge numbers of mortgage bonds (mortgage-backed securities) and that pushes rates lower.

But it’s also because markets can see mountains of risk (something that typically also drives mortgage rates down) over the coming months, including:

1. A second wave of COVID-19 — Might the one currently crashing over Western Europe end up here, just when the flu season starts?
2. An economic recovery that seems to be weakening by the day
3. The current and possibly permanent failure to pass a federal stimulus package — Talks are continuing but the House is due to enter recess this week
4. A looming general election that could leave the country with huge uncertainty if the outcome is disputed

In spite of all the above, stock markets mount rallies in fits and starts. But is that really because investors see glimmers of hope — or are they whistling in the wind?

Friday’s official employment situation report for September might give a steer on whether any optimism is justified. So that could be a big day for mortgage rates.

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 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