Today’s mortgage and refinance rates 

Average mortgage rates moved moderately higher yesterday after two days of falls. They haven’t yet reached their recent high, but they’re not far off. However, let’s keep this in perspective. There are very few times in history when you could have found rates as low as today’s.

So far this morning, it’s looking as if mortgage rates today might edge higher. But yesterday was the latest in a stream of days when those rates started off in one direction and then changed their course or rate of acceleration. So don’t take my daily predictions too seriously.

Current mortgage and refinance rates 

Should you lock a mortgage rate today?

Yesterday’s rise doesn’t necessarily mean I was right that recent falls were just a blip. But it doesn’t harm my case. And, absent extraordinary events, I’m still expecting mortgage rates to head slowly higher for a long time to come.

So, for now, my personal rate lock recommendations 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

>Related: 7 Tips to get the best refinance rate

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 roughly the same time yesterday, were:

• The yield on 10-year Treasury notes inched higher to 1.75% from 1.74%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mostly 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 may happen when indexes are lower. But this is an imperfect relationship
• Oil prices rose to $82.79 from $82.64 a barrel. (Neutral for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity 
• Gold prices barely moved, rising to $1,822 from $1,821 an ounce. (Neutral for mortgage rates*.) In general, it is 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 — decreased to 50 from 62 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. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.

So use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today are likely to edge a little higher. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

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.

A lot is going on at the moment. 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?

This morning’s retail sales figures for December were much worse than expected at -1.9% compared to November. And that suggests that the economic recovery might be struggling as COVID-19 bites harder.

Investors have been reacting to economic reports unusually of late. Sometimes they react sharply only to apparently change their minds later. On other occasions, they’ve taken hours or days to fully digest the new data. So we may have to wait to see how today’s figures pan out.

Markets will likely be distracted today by the start of the earnings season. That’s when large companies publish their earnings for the previous quarter. And today’s focus may mainly be on the banks that are doing that this morning.

Generally

Overall, I’m expecting mortgage rates to continue higher in response to three forces:

1. Optimism over the Omicron variant’s impact on the COVID-19 pandemic — It’s possible that we’re closer to herd immunity than seemed possible until recently, though the science is far from conclusive
2. The highest inflation rate since 1982 — Bond investors hate high inflation. And they largely determine mortgage rates
3. The Federal Reserve’s winding down of its pandemic-era stimulus programs, including low interest rates and asset purchases designed to keep mortgage rates artificially low

Of course, the future’s never certain. And something huge could arise that changes everything and sends mortgage rates tumbling. A new and more damaging COVID-19 variant could emerge. We might go to war with Russia over Ukraine. The stock market could crash. All those (and more) are possible. But they currently look improbable.

For a longer overview of what’s driving mortgage rates, including why markets are optimistic about Omicron, read the weekend edition of this daily rates report.

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.

Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.

Freddie’s Jan. 13 report puts that weekly average for 30-year, fixed-rate mortgages at 3.45% (with 0.7 fees and points), up from the previous week’s 3.22%.

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

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Dec. 20 and the MBA’s on Dec. 21.

Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until later this month. And its figures are already looking stale.

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

Find your lowest rate today

You should comparison shop 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