Today’s mortgage and refinance rates 

Average mortgage rates fell yesterday, wiping out Wednesday’s rise. And they begin this morning just a shade lower than they were at the same time last Friday.

So far this morning, it’s looking as if mortgage rates today might be 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?

Markets remain highly unpredictable. And all this month we’ve seen alternating periods of rises and falls.

Naturally, this makes both locking and floating your rate risky. You might miss out on some falls if you lock too soon. Or make losses if you lock too late. Personally, I’d lock with those odds and stakes, regardless of when I was due to close. But you may be braver than I am.

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 inched up to 1.26% from 1.25%. (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 higher shortly after opening. (Bad 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 fell to $62.91 from $63.50 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices inched lower to $1,787 from $1,788 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 up to 22 from 21 out of 100. (Bad 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 20th, 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

Markets are still responding to the Federal Reserve document that dropped on Wednesday afternoon. Of course, that’s not the only influence, as this morning’s Financial Times makes clear. It’s running the headline, “US stocks whipsaw on Fed taper concerns and global growth jitters.”

And the main causes of those jitters are:

1. The unknown future impact of the COVID-19 Delta variant
2. Slowing growth in China
3. Continuing supply chain disruption, especially for microchips
4. The fact that inflation remains higher than usual

However, at least so far, these have had little effect on growth in the US. But economic data are more mixed than they were recently.

Have the experts been wrong all along?

If you skip a few paragraphs, you’ll find the heading, “Expert mortgage rate forecasts.” Yesterday, both Fannie Mae and the Mortgage Bankers Association (MBA) updated their mortgage rate forecasts. And they both expect lower average rates for 30-year, fixed-rate mortgages than they were previously anticipating. However, they both forecast some increases, just smaller ones.

But the two forecasts are sharply different. Fannie thinks those rates will average 2.8% in the current quarter, inch up to 2.9% in the next and hold at 3% for the whole of the first half of 2022. However, the MBA is expecting them to be 2.9% this quarter and 3.3% next. And it reckons they’ll be up at 3.5% and then 3.7% in the first two quarters of next year. Indeed, the MBA predicts an average of 4.2% throughout 2022 and 4.8% in 2023.

Does this mean that those experts (and I) have been wrong? Well, yes and no. I still think that higher rates are ahead. And I fear that the MBA’s forecasts may turn out to be more accurate than Fannie’s. But there’s no denying we’ve all been wrong about the timing of increases.

You’d have to be very forgiving to overlook those timing errors. And you may think they reduce (or wholly undermine) our credibility. But I suspect we’ll turn out to be right, if late. I’ll dig further into the latest forecasts in tomorrow’s weekend edition.

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. 19 report puts that weekly average at 2.86% (with 0.7 fees and points), down from the previous week’s 2.87%.

Expert mortgage rate forecasts — Updated today

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 and the MBA’s were updated on Aug. 19. But Freddie’s were last refreshed on July 15 because it now publishes these figures only quarterly.

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 20th, 2021)

Mortgage rate methodology