Today’s mortgage and refinance rates 

Average mortgage rates edged lower yesterday. And they remain exceptionally low while drifting within the tight range that has been around for a few weeks now.

Mortgage rates today may hold steady or move lower yet again. But that prediction’s based on early movements in markets and those might change as the hours pass.

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?

Falls over the last couple of business days mean mortgage rates remain firmly within the limited range they’ve been constrained by for weeks. Of course, they could break free at any time. But I can’t see any reason for them to do so, at least before Friday. And probably not then.

All that means you’re not winning or losing right now by floating or locking your rate. But, when rates do break free, they’re more likely to move upward than downward.

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 lower to 1.28% from 1.30%. (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 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 $68.71 from $68.28 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices held steady at $1,816 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 — dropped to 53 from 57 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 fall a little. 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 31st, 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

Last Thursday, Freddie Mac Chief Economist Sam Khater wrote:

The tug-of-war between the economic recovery and rising COVID-19 cases has left mortgage rates moving sideways over the last few weeks. Overall, rates continue to be low, with a window of opportunity for those who did not refinance under three percent.

Why did Mr. Khater mention a “window of opportunity?” Well, it’s because he — like most professional watchers of mortgage rates — thinks they’re going to rise when they finally break out of their current tight range.

Experts are divided over how far and how quickly they’re going to rise. But they pretty much all think the movement will be upward.

A surplus of uncertainty

But even those who are expecting a sharp rise acknowledge that they can’t be sure. At the moment, companies and the economy are doing exceptionally well. And we’re on track for 2021 bringing the fastest economic growth since the Reagan administration. That alone would normally bring higher mortgage rates.

But that extraordinary recovery might yet be derailed. Unexpected disasters are a constant threat to markets yet rarely emerge. But the possibility of new variants of the SARS-CoV-2 virus, which causes COVID-19, is especially worrying to many investors.

C.1.2.

Some media are already covering such a new variant, called C.1.2., which has recently been detected in South Africa. And The Guardian today quoted Dr. Megan Steain, who’s a virus expert and lecturer in immunology and infectious diseases at the University of Sydney’s Central Clinical School:

It [C.1.2.] contains quite a few key mutations that we see in other variants that have gone on to become variants of interest or concern. Any time we see those particular mutations come up, we’d like to keep an eye on the variant to see what it’s going to do. These mutations may affect things like whether it evades the immune response, or transmits faster.

But Dr. Steain went on to explain that it was far from sure that C.1.2. would prove dangerous. And, indeed, she though that “we’re still very much at a point where this could die out, the prevalence is really low.” she said.

With luck, new variants will indeed die out before they take hold. But there’s a clear risk of some not doing so, wreaking real damage. And that could disrupt the economic recovery, which would likely cause mortgage rates to plummet.

But most of us would rather live with higher mortgage rates than witness such a disaster, were we to have a choice. And, luckily, the chances are our wish will come true.

For more background, read Saturday’s weekend edition of this column. And my colleague Tim Lucas’s longer-term forecast, Mortgage interest rates forecast and trends: Will rates go down in September 2021?

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. 26 report puts that weekly average at 2.87% (with 0.6 fees and points), up from the previous week’s 2.86%.

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 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. And its forecast is already looking stale.

However, given so many unknowables, the whole 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 31st, 2021)

Mortgage rate methodology