Today’s mortgage and refinance rates
Average mortgage rates moved lower yesterday by a worthwhile amount. But they’re still a long way off regaining the ground they’ve lost so far this year. Still, they remain at levels that would have been unthinkably low before the pandemic.
Once again, markets are signaling that mortgage rates today might hold steady or barely move. But we’ve seen in recent days how inaccurate those early signs can be.
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Current mortgage and refinance rates
|Conventional 30 year fixed||3.644%||3.666%||-0.04%|
|Conventional 15 year fixed||2.955%||2.992%||-0.01%|
|Conventional 20 year fixed||3.347%||3.383%||-0.04%|
|Conventional 10 year fixed||2.936%||3.009%||-0.01%|
|30 year fixed FHA||3.675%||4.448%||-0.02%|
|15 year fixed FHA||2.932%||3.582%||-0.06%|
|5/1 ARM FHA||2.821%||3.469%||Unchanged|
|30 year fixed VA||3.452%||3.648%||+0.01%|
|15 year fixed VA||3.238%||3.589%||Unchanged|
|5/1 ARM VA||2.705%||2.718%||-0.07%|
|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?
I still reckon the last couple of days of falls have been a blip rather than the start of a longer downward trend. Of course, I might be wrong. But I’m expecting mortgage rates to drift slowly higher for some time to come.
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
- 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 held steady at 1.74%. (Neutral for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
- Major stock indexes were higher. (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 rose to $82.64 from $82.16 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
- Gold prices fell to $1,821 from $1,824 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 — decreased to 62 from 66 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 change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. 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 are likely to remain unchanged or nearly unchanged. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.
Find your lowest rate. Start here (Jan 13th, 2022)
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’s going to happen to mortgage rates in coming hours, days, weeks or months.
Are mortgage and refinance rates rising or falling?
Mortgage rates have risen sharply so far this year, relieved only by two days of falls very recently. I’m expecting them to continue higher at a more steady pace.
Of course, there will still be inevitable periods of falls. But I think the underlying trend will be an upward one.
I’ve been saying that inflation is one of the main drivers of higher mortgage rates. Yet, when yesterday’s consumer price index was released and showed inflation rising at its highest rate since 1982, those rates actually fell. And there was an echo of that this morning when markets shrugged off even higher figures in the producer price index. So, how come these numbers aren’t producing a sharper response?
Well, it’s mainly because investors think such high inflation rates are likely to force the Federal Reserve to pick up the pace of its anti-inflationary policies. And that might mean more interest rate hikes this year: probably three or four, starting as early as March.
CNN Business reported this morning that one Bank of America strategist had told it, ” … rates could be 1 [percentage point] higher or more by the end of the year.”
Rate hikes might curb inflation but they’re also likely to damage the economic recovery. And that’s not popular with investors.
Why inflation will eventually push mortgage rates higher.
Mortgage rates are largely determined by the trading of mortgage-backed securities (MBSs). And MBSs are a type of fixed-income bond.
Suppose you could today buy an MBS that gave you an annual income (“yield”) of 2%. With inflation running at 7% annually, you’re guaranteed a real-terms loss.
Of course, people will still buy MBSs (and Treasury bonds) because they’re safe. Were the relatively risky stock market to crash (unlikely but not unthinkable), your bond investments might be all that stands between you and ruin.
And a safe haven for money doesn’t necessarily have to be the most attractive investment. It’s a bit like the old joke about two friends rambling in the forest when they’re charged by a bear. You don’t have to outrun the bear. You only have to outrun your pal.
Similarly, MBSs don’t have to outcompete all markets. They just have to be more attractive than similar safe investments. That’s why there are still takers for negative interest rates in parts of Europe.
For a longer overview of what’s driving mortgage rates, including why markets are optimistic about Omicron, read the weekend edition of this daily rates report.
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.
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 Jan. 13 report puts that weekly average for 30-year, fixed-rate mortgages at 3.45% (with 0.7 fees and points), up from the previous week’s 3.22%.
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, 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 Dec. 20 and the MBA’s on Dec. 21.
Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until later this month. And its figures are already looking stale.
However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.
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.”
Verify your new rate (Jan 13th, 2022)
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.