Today’s mortgage and refinance rates
Average mortgage rates soared again yesterday. Indeed, some had an even worse day than last Friday. And the average for a conventional 30-year, fixed-rate mortgage is now above 6%.
Things are looking better across all markets this morning. And mortgage rates today look likely to hold steady. But that could change as the hours pass.
Current mortgage and refinance rates
|Conventional 30 year fixed||6.307%||6.329%||+0.54%|
|Conventional 15 year fixed||5.33%||5.366%||+0.49%|
|Conventional 20 year fixed||6.116%||6.122%||+0.31%|
|Conventional 10 year fixed||5.037%||5.128%||+0.26%|
|30 year fixed FHA||6.048%||6.719%||+0.42%|
|15 year fixed FHA||5.351%||5.636%||+0.16%|
|30 year fixed VA||5.614%||5.823%||+0.59%|
|15 year fixed VA||5.622%||5.975%||Unchanged|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
Should you lock a mortgage rate today?
Don’t lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.
The exceptionally sharp rises in mortgage rates we’ve seen over the last two working days have been extraordinary and rare. And, as I said yesterday, it’s not unusual to see a bounce or period of calm after such events. That looks to be happening today. But I’d expect only a holding steady or a relatively modest fall compared to those recent rises. Read on for what might happen tomorrow.
In the meantime, my personal rate lock recommendations for the longer term 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 yesterday, were:
- The yield on 10-year Treasury notes soared to 3.34% from 3.28%. (Very 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 a little higher 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 climbed to $122.61 from $119.11 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
- Gold prices fell to $1,821 from $1,835 an ounce. (Neutral for mortgage rates*.) It is generally 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 — fell to 18 from 22 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
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
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, mortgage rates today might barely move. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.
Important notes on today’s mortgage rates
Here are some things you need to know:
- 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’
- Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
- When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
- Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Are mortgage and refinance rates rising or falling?
Both The Wall Street Journal and The Financial Times this morning described the chances of the Federal Reserve hiking its key rate by 0.75% tomorrow as “likely.” The last time it executed such a large rise was in 1994, according to The Wall Street Journal (paywall).
Only a month ago, Fed Chair Jerome Powell calmed markets by saying the central bank was not “actively considering” such a large hike. But, at that time, there was hope that inflation might have peaked. Last Friday’s consumer price index put paid to that hope. And this morning’s producer price index won’t have dispelled the gloom.
This is what’s been roiling markets for the last two business days. To what extremes might the Fed go in its efforts to tame inflation?
Tomorrow’s a big day for mortgage rates
For most markets, it’s all about the Fed’s own key rate, which directly affects most borrowing costs. It doesn’t directly affect mortgage rates but it can have a significant knock-on effect.
But mortgage rates will be directly affected by any new Fed decisions over its $2.7 trillion holdings of mortgage-backed securities (MBSs). It’s already preparing to run those holdings down. But if it starts selling them earlier than planned and at a faster pace than markets can cope with, it risks flooding the market.
MBSs are the type of bond that largely determines mortgage rates. And, like all bonds, its prices and yields move inversely to each other. In other words, lower prices mean higher yields and vice versa.
It’s the yields on MBSs that affect mortgage rates. So the Fed flooding the MBS market with its holdings would push down prices and push up yields and mortgage rates.
How big is this danger? Markets seem to think it’s very dangerous, which is why mortgage rates have been so badly hit. Those markets have been anticipating the Fed’s likely moves and pricing in their expectations. This morning, with mortgage rates likely falling, it seems those markets think they may have overreacted to the threat.
But we and markets will know tomorrow afternoon whether they have. The Fed will unveil its plans in two stages: a statement and projections at 2 p.m. (ET) and a news conference 30 minutes later.
What might happen tomorrow?
As I said yesterday, that presents three possibilities for mortgage rates tomorrow afternoon and perhaps for some time to come. They might move:
- Higher if the Fed tackles inflation more aggressively than currently anticipated
- Lower if its plans are less aggressive than expected
- Nowhere or hardly at all if markets anticipated the plans correctly
Read the weekend edition of this daily article for more background.
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 that year, according to Freddie Mac.
The most recent weekly record low occurred on Jan. 7, 2021, when it stood at 2.65% for 30-year fixed-rate mortgages.
Rates then bumbled along, moving little for the following eight or nine months. But they began rising noticeably that September. Unfortunately, they’ve been mostly shooting up since the start of 2022, although May was a kinder month.
Freddie’s June 9 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.23% (with 0.9 fees and points), up from the previous week’s 5.09%.
Note that Freddie expects you to buy discount points (“with 0.9 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would be closer to the ones we and others quote.
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 three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on May 19, and the MBA’s on Jun. 10. Freddie’s were released on Apr. 18. But it now updates its figures only quarterly so they’re already looking stale.
Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. Recent events certainly make them look that way.
Find your lowest rate today
You should comparison shop 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.”
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.