Today’s mortgage and refinance rates 

Average mortgage rates edged lower yesterday. It was nothing dramatic. But it was welcome nonetheless.

Things were looking good for those rates first thing. However, the Federal Reserve will be publishing a crucial document at 2 p.m. (ET) this afternoon (more on that below). And its contents could send mortgage rates higher or lower — or leave them unchanged. So I have to say that mortgage rates today are unpredictable.

Find and lock a low rate (Jul 8th, 2021)

Current mortgage and refinance rates 

Find and lock a low rate (Jul 8th, 2021)

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?

There’s no reason why you shouldn’t continue to float while mortgage rates gently drift down from their mid-June spike. However, the Fed is releasing a crucial document (see below) this afternoon that might — just possibly — change the direction of travel for these rates. So that’s an additional risk you should consider.

And be aware that recent downward movements could reverse at any time. Indeed, most in the mortgage industry and beyond expect those rates to rise fairly soon. So my personal rate lock recommendations must remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• LOCK if closing in 30 days
• LOCK if closing in 45 days
• LOCK 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.

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. 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

This morning’s Financial Times contains the headline, “Yield on 10-year Treasury dips to lowest in four months.” That’s good because mortgage rates often track those yields closely. But why the fall?

The FT goes on to explain what it thinks is the driver. Namely, investors are backing away from the idea that the Federal Reserve will be forced to end its stimulus program early. Or, in its words, “traders cut bets on tighter Fed policy.”

Let’s avoid doing a serious dental examination of this particular gift horse. But let’s also not kid ourselves that our equine will necessarily live long. Because there’s a chance it won’t survive beyond 2 p.m. (ET) this afternoon.

That’s when the Fed releases the minutes of the last meeting of its key policy body, the Federal Open Market Committee or FOMC. Yesterday, investors were betting on those minutes revealing a relatively “dovish” committee with a wait-and-see approach. But, if they instead reveal an increasingly “hawkish” one, with many committee members arguing for tougher action soon, mortgage rates may rise.

So today’s another cliffhanger day. Mortgage rates could rise or fall on those minutes. But we won’t know which until after they’re released. And there’s always a chance that they’ll say nothing unexpected, in which case those rates may barely move.

Another issue

The meeting those minutes recorded happened too long ago for the committee’s members to take into account the recent spike in oil and gas prices. Yesterday evening, The New York Times explained:

West Texas Intermediate, the U.S. oil-price benchmark, hit $76.98 a barrel on Tuesday, its highest level in six years, as OPEC, Russia and their allies again failed to agree on production increases. Prices moderated later in the day but remained nearly $10 a barrel higher than in mid-May.

— NYT, “Rising Oil and Gas Prices Add to U.S. Economic Challenges,” (paywall) June 6, 2021

Right now, the Fed firmly believes that inflation will prove a transitory phenomenon. However, as The Times’s article continues: ” … if rising oil prices lead consumers and businesses to believe that faster inflation will continue, that could be a harder problem for the Fed.”

Mortgage rates and inflation: Why are rates going up?

For more background, read Saturday’s weekend edition of this column, which has more space for in-depth analysis.

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 in April, though those moderated during the second half of that month. Meanwhile, May saw falls very slightly outweighing rises. Freddie’s July 1 report puts that weekly average at 2.98% (with 0.6 fees and points), down from the previous week’s 3.02%.

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 remaining quarters of 2021 (Q2/21, Q3/21, Q4/21) and the first quarter of 2022 (Q1/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on June 16 and the MBA’s on June 18. Freddie’s forecast is dated April 14. But it now updates only quarterly. So its numbers are looking stale.

Forecaster	Q2/21	Q3/21	Q4/21	Q1/22
Fannie Mae	3.0%	3.0%	3.2%	3.2%
Freddie Mac	3.2%	3.3%	3.4%	3.5%
MBA	3.0%	3.2%	3.5%	3.7%

However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.

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 (Jul 8th, 2021)

Mortgage rate methodology