Today’s mortgage and refinance rates 

Average mortgage rates edged lower yesterday. That was a welcome relief after five straight business days of rises.

Early movements in markets this morning suggest mortgage rates today might rise modestly. But that could change as the day progresses — as happened yesterday.

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?

It’s still much too soon to put recent movements in mortgage rates into a wider context. So yesterday’s drop might turn out to be a mere blip. And so may recent rises. We’re a long way off being able to identify a trend.

But the risks of continuing to float your rate are greater than they were at the start of last week. (Read on to discover why.) And anyone a little cautious might prefer to cash in her chips rather than continue to gamble on further rate falls.

Still, for now, my personal rate lock recommendations are:

• 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 1.37% from 1.36%. (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 $69.12 from $67.61 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices climbed to $1,747 from $1,742 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 higher to 42 from 41 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 move higher. 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 12th, 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

This morning’s weekly employment numbers were good. And the producer price index was hotter than expected.

Yesterday, CNBC’s Fast Money show hosted a debate (video) with participants including RBC Wealth Management Technical Strategist Rob Sluymer and traders Guy Adami, Tim Seymour, Steve Grasso and Nadine Terman. The discussion was wide-ranging but mostly focused on yields on 10-year Treasury notes. And those yields are important to us because mortgage rates typically shadow them.

Some thought these yields had reached a Goldilocks spot: not too hot, not too cool: just right. They saw the current level as likely becoming the floor in a relatively narrow new range: roughly 1.35% to 1.5%. One expected them to soar to over 1.75% in the next few months. And nobody expected them to fall far.

Of course, pundits are as famed for their forecasting failures as their successes. But their views seem to be the new mood on Wall Street and beyond. And, once enough investors believe something, that thing often becomes a self-fulfilling prophecy.

If you believe they’re likely to be proved right, you’ll probably want to lock your rate now. Because that would mean there are few rewards in prospect for those who continue to float. But plenty of risks would remain.

Tapering talk

I recently listed four top Federal Reserve officials who have recently advocated beginning to taper (gradually reduce) the Fed’s current stimulus program. This is important because that program includes buying mortgage-backed securities (MBSs) by the boatload. And that’s keeping mortgage rates artificially low.

Well, those four have been joined by two others. San Francisco Fed President Mary Daly and Dallas Fed President Robert Kaplan have both said that tapering should begin earlier than previously expected. And Mr. Kaplan suggested plans should be announced on Sept. 22, as others among our six have.

But some think an announcement could come even sooner. Yesterday, Reuters reported:

Speculation is growing that Fed Chair Jerome Powell will signal timings on tapering stimulus at a meeting of central bankers in Jackson Hole, Wyoming, on Aug. 26-28.

That’s only a couple of weeks away!

All this is of great interest to followers of mortgage rates. Because the last time the Fed announced it would taper a similar program was back in 2013. And, then, mortgage rates shot up as a result of the announcement. Investors didn’t wait for the actual tapering to begin. The signal that it would happen months later was enough to trigger those sharp and sustained rises.

And yet

Things are looking undeniably grim for those who want lower mortgage rates. But, as the late Harvard economist John Stuart Galbraith once observed: “The only function of economic forecasting is to make astrology look respectable.”

And there are plenty of threats to the economic recovery that could force investors and the Fed to act in ways that push mortgage rates significantly lower again. But, to me, those appear relatively unlikely while higher rates look probable. Of course, what I think is unimportant. It’s what you think that counts.

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

Mortgage rates and inflation: Why are rates going up?

Recently — updated today

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 were 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 12th, 2021)

Mortgage rate methodology