Today’s mortgage and refinance rates 

Average mortgage rates moved lower yesterday, but only by the smallest measurable amount. And many lenders won’t bother changing your rate, instead, knocking a bit off your closing costs. Still, with 30-year, fixed-rate mortgages averaging 3.1% this week, according to Freddie Mac, we remain in a period of incredibly inexpensive home loans.

Judging from early signs in markets, mortgage rates today may fall again, though probably further than yesterday. But markets are on edge over whether the president will reappoint the Federal Reserve chair. And they may change direction if that decision is announced.

Find your lowest rate. Start here (Nov 19th, 2021)

Current mortgage and refinance rates 

Should you lock a mortgage rate today?

Falls in mortgage rates are great. But I still reckon they’re likely to prove brief and shallow dips in a longer upward trend.

So 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 last yesterday, were:

• The yield on 10-year Treasury notes tumbled to 1.53% from 1.60%. (Good 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 soon 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. But this is an imperfect relationship
• Oil prices fell to $77.04 from $78.86 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 down to $1,863 from $1,866 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 — dropped to 74 from 77 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 their 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 look likely to fall. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find your lowest rate. Start here (Nov 19th, 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 a lot is 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?

In Monday’s edition of this daily report, I identified the four main forces trying to push mortgage rates higher, along with four that are trying to drag them lower. And I stand by my conclusion that the four exerting upward pressure are stronger than the others.

But it’s important to recognize that all these forces wax and wane. And yesterday and today I’m looking at things that might prove me wrong. In other words, I’m seeking out reasons why mortgage rates might fall.

So far, none of them has persuaded me that my analysis is wrong. And I still think those rates are heading higher. But you may disagree.

Bond markets are wonky (and wonkish)

This morning’s Financial Times contains an interview (paywall) with veteran bond investor Dan Fuss. Mr. Fuss’s career in finance goes back to 1958, so veteran is no overstatement.

The FT summed up the current state of bond markets:

The stimulus has helped produce a remarkable market comeback, lifting stocks to record highs and helping pin government bond yields near historic lows. But the investor scramble for higher-returning but lower-rated, riskier debt is now so ferocious it is unnerving money managers like Fuss, the vice-chair of $353bn investment house Loomis Sayles.

FT — Low yields have left investors numb to risk, bond veteran Dan Fuss says — Nov. 19, 2021

So what does that mean? And what does it have to do with mortgage rates?

Let’s start with the second question. Mortgage rates are largely determined by the yield on a type of bond called a mortgage-backed security (MBS). And, as with all bonds, yields on MBSs fall when demand is (and therefore prices are) high and rise when demand and prices are low. Mortgage rates follow those yields.

Stocks and bonds

Traditionally, investors maintain a balanced portfolio during good economic times with lots of risky stocks offset by plenty of safe bonds. But Mr. Fuss is warning that too many investors are ignoring bond markets because yields are so low. He talks about a lack of “natural prudence and caution.”

But, hang on! If demand for MBSs and other safe bonds is low, how come yields (and therefore mortgage rates) aren’t rising more sharply? It’s probably because demand is being propped up by two main sources.

First, for the last 20 months, the Federal Reserve’s been spending each month $80 billion on Treasury bonds and $40 billion on MBSs. And, secondly, banks currently have way more deposits than they can lend to borrowers. So they’re likely parking much of their excess money in both sorts of bonds.

Those may have been enough to keep bond yields and mortgage rates artificially low. But note that the Fed will be winding down its purchases starting this month.

What worries Mr. Fuss is what might happen if the stock market crashes. Instead of having nice safe bonds to fall back on, investors will be fully exposed to their losses. And that could lead to another financial meltdown, which would almost certainly bring sharply lower mortgage rates.

Of course, only a few doomsayers are worried about an imminent stock market crash. And I’m not expecting one. But you could say the same for the period before Lehman Brothers collapsed.

Inflation

One of the main drivers of higher mortgage rates is persistent and warm (or hot, by recent standards) inflation. Read last Saturday’s weekend edition for more information about that.

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 Nov. 17 report puts that weekly average for 30-year, fixed-rate mortgages at 3.1% (with 0.7 fees and points), up from the previous week’s 2.98%.

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, 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 Nov. 18, Freddie’s on Oct. 15 and the MBA’s on Oct. 18.

Forecaster	Q4/21	Q1/22	Q2/22	Q3/22
Fannie Mae	3.1%	3.2%	3.3%	3.3%
Freddie Mac	3.2%	3.4%	3.5%	3.6%
MBA	3.1%	3.3%	3.5%	3.7%

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

All these forecasts expect at least modestly higher mortgage rates fairly soon.

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 (Nov 19th, 2021)

Mortgage rate methodology