Today’s mortgage and refinance rates
Average mortgage rates fell modestly yesterday. They’d been climbing before that day’s crucial announcements by the Federal Reserve but turned lower when the news was a bit less bad than expected. More on that below.
First thing this morning, markets were signaling that mortgage rates today might remain close to steady. But that could change as the hours pass.
Current mortgage and refinance rates
|Conventional 30 year fixed||5.465%||5.491%||-0.15%|
|Conventional 15 year fixed||4.656%||4.686%||-0.08%|
|Conventional 20 year fixed||5.545%||5.583%||-0.06%|
|Conventional 10 year fixed||4.456%||4.515%||-0.14%|
|30 year fixed FHA||5.514%||6.28%||+0.14%|
|15 year fixed FHA||4.78%||5.183%||+0.01%|
|30 year fixed VA||5.15%||5.366%||+0.14%|
|15 year fixed VA||4.75%||5.094%||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.
Yesterday’s fall in mortgage rates was small because the Fed’s announcements were close to market expectations. So, for now, little has changed.
We’ll have to see whether those announcements have a longer-term, slow-burn effect, which might drive further falls.
But, 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 edged higher to 3.03% from 3.01%. (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 soon 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. But this is an imperfect relationship
- Oil prices rose to $110.53 from $106.60 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices rose to $1,897 from $1,867 an ounce. (Good 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 — increased to 42 from 34 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
*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 wider 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?
Yesterday’s Fed announcements
Yesterday afternoon’s Fed announcements were far from the bombshell for mortgage rates that many had feared. Yes, those rates moved down as news emerged and was digested. But they ended the day very close to where they’d started it.
So, my speculation yesterday that the Fed might wish to make a “grand gesture” as penance for ignoring inflation for too long was comprehensively wrong. I’m glad I called my musings ” … just one guy’s gut feeling.” And continued, ” … I’m certainly not predicting that mortgage rates will rise this afternoon.” (Defensive? Me?)
The part of that afternoon’s news conference that most impressed markets was Fed Chair Jerome Powell’s taking off the table of future 0.75% rate hikes. But he did say that he expected 0.5% ones during June and July in addition to the one he unveiled yesterday.
Three 0.5% increases in the federal funds rate over three consecutive months is still exceedingly rare. Indeed, the last time there was a single hike of that size was in 2020. So we’re looking at extreme measures.
Fed’s mortgage bonds
Of course, everyone was expecting yesterday’s rate hike. And markets had already priced it in.
What might have driven mortgage rates higher was the Fed’s unveiling of its plans to run down its holdings of mortgage-backed securities. Those MBSs are the type of bond that largely determines mortgage rates.
And the central bank currently owns MBSs worth $2.72 trillion. So its disposal of those could push mortgage rates significantly higher. However, the Fed’s plans, unveiled yesterday, were sufficiently gentle to avoid spooking markets. Here’s what was revealed:
- Starting Jun. 1, the Fed will not replace $17.5 billion of MBSs each month as mortgages are redeemed or refinanced
- From Sept. 1, that monthly sum will double to $35 billion
- In late 2022 or early ‘23, the Fed will begin to actively sell MBSs (This was revealed in the minutes of the Fed’s March meeting, not yesterday)
All that was sufficiently close to market expectations for the announcements to have little effect on mortgage rates yesterday.
Occasionally, markets take a while to digest information. And it’s just possible we’ll see more reaction to yesterday’s announcements today and tomorrow.
But the next thing that could push mortgage rates far is tomorrow morning’s official employment situation report for April. So stand by for that.
Read the weekend edition of this daily article for more background.
Recent trends — 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 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 shooting up since the start of 2022.
Freddie’s May 5 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.27% (with 0.9 fees and points), up from the previous week’s 5.10%.
Note that Freddie expects you to buy discount points (“with 0.8 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 Apr. 19, Freddie’s on Apr. 18, and the MBA’s on Apr. 13.
Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. I’m afraid I’m less optimistic than any of them.
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.