Today’s mortgage and refinance rates 

Average mortgage rates edged lower yet again yesterday. So they’re heading the right way. However, recent falls have been smaller than recent rises. So there’s a way to go to the all-time low. Still, these rates remain exceptionally low by any standards.

Markets were flat following disappointing retail sales figures this morning. And mortgage rates today look likely to remain unchanged or barely changed.

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?

Nobody expects you to lock while mortgage rates are actually falling. But, if you continue to float your rate, you need to remain vigilant. Because most experts — though not all, as we discuss below — are expecting rate rises fairly soon.

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
• FLOAT if closing in 45 days
• FLOAT 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.

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 edged up to 1.25% from 1.23%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were lower shortly after 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 may happen when indexes are lower
• Oil prices rose to $67.51 from $66.21 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices nudged up to $1,793 from $1,787 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 — tumbled to 37 from 46 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, so far mortgage rates today look likely to hold steady or just inch either side of the neutral line. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find and lock a low rate (Aug 17th, 2021)

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. And a recent regulatory change has narrowed a gap that previously existed

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

If there’s ever a consensus among financial journalists, the current one is that this week’s falls in mortgage rates are down to anticipation of tomorrow’s publication of Federal Reserve documents. (Well, that and a slowdown in China’s growth.) Specifically, at 2 p.m. (ET) on Wednesday, the Fed will release the minutes of the last meeting of its monetary policy body, the Federal Open Market Committee (FOMC).

Why that anticipation? Well, it’s because those minutes might reveal more about the Fed’s current thinking about “tapering.” Regular readers know all about this. However, in brief, the Fed is currently buying huge quantities of a type of bond called a mortgage-backed security (MBS) as part of its stimulus strategy. It’s buying Treasury bonds, too. But it’s the MBSs that are currently keeping mortgage rates artificially low.

And the Fed is signaling that it plans to gradually reduce (“taper”) those purchases, which would normally push up mortgage rates, perhaps sharply. However, nobody yet knows precisely when it will announce the timing of that move or when tapering itself will begin. Perhaps those FOMC minutes will provide more clues.

Might mortgage rates remain low?

Some believe that tapering will make very little difference to bond prices and yields. And, yesterday, Steven Major of HSBC told CNBC’s Squawk Box show that his bank was forecasting that yields on US Treasury notes (something that mortgage rates tend to shadow) would end this year and next at 1%. You can watch the clip on CNBC’s website.

If Mr. Major is right, that would see those yields fall significantly further from their current levels (they closed at 1.24% last night). And that might bring mortgage rates to new all-time lows and a sustained period of hyper affordability.

Almost as surprisingly, Mr. Major dismissed concerns that tapering would have much effect, at least on Treasury yields. He believes that the circumstances now are very different from those in 2013 when a similar announcement triggered sharp spikes in both those yields and mortgage rates.

How likely are lower mortgage rates?

Now, Mr. Major is global head of fixed-income research for one of the world’s biggest banks. And I’m not.

So, had CNBC given him time to provide the reasons behind his analysis, I might well have accepted his arguments. But it didn’t.

And most other experts don’t currently share his prognosis. Indeed, the other day, I quoted another guest on a CNBC show who reckoned yields on 10-year Treasury notes would jump to 1.75% or higher before the end of this year. And that would likely see 30-year fixed mortgage rates at roughly 4.5%.

So my point in telling you about Mr. Major’s forecasts wasn’t to encourage you to necessarily believe them, though they may turn out to be true. And certainly not for you to rely on them. It was to demonstrate the range of opinions and possible future scenarios that the current uncertainty has thrown up.

And the message for you to take away today is that nobody knows much.

For more background, read Saturday’s weekend edition of this column.

Mortgage rates and inflation: Why are rates going up?

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 have been mostly replaced by falls since April, though typically small ones. Freddie’s Aug. 12 report puts that weekly average at 2.87% (with 0.7 fees and points), up from the previous week’s 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 rate forecasts for the remaining quarters of 2021 (Q3/21 and Q4/21) and the first two quarters of 2022 (Q1/22 and Q2/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on July 19, Freddie’s on July 15 and the MBA’s on July 21.

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

All these forecasts expect higher mortgage rates soon. But the differences between the forecasters are stark. And it may be that Fannie isn’t building in the Federal Reserve’s tapering of its support for mortgage rates while Freddie and the MBA are.

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 (Aug 17th, 2021)

Mortgage rate methodology