Today’s Mortgage and Refinance Rates
Average mortgage rates fell again yesterday, leading to attractive gains similar to Monday’s. We now have to go back to the last days of April to find lower prices.
Following the release earlier this morning of the April Consumer Price Index, today, mortgage rates are expected to rise. But, of course, these things are never certain.
Current mortgage and refinance rates
|30-year fixed conventional||5.485%||5.511%||-0.1%|
|15-year fixed conventional||4.672%||4.705%||-0.03%|
|20-year fixed conventional||5.534%||5.572%||-0.09%|
|10-year fixed conventional||4.565%||4.639%||-0.01%|
|30-year fixed FHA||5.521%||6.294%||-0.06%|
|15-year fixed FHA||4.816%||5.103%||-0.18%|
|30-year fixed PV||5.222%||5.435%||+0.08%|
|15-year fixed VA||4.75%||5.094%||Unchanged|
|Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.|
Should you lock in a mortgage rate today?
Don’t lock in on a day when mortgage rates look set to drop. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. Thus, they do not change daily to reflect fleeting sentiments in volatile markets.
Unfortunately, I’m still not convinced that this week’s sizeable declines are a turning point for mortgage rates. And I suspect that we will soon see more rises.
But not everyone agrees with me. See below for a discussion of this debate.
Still, my personal longer-term rate lock recommendations remain:
- LOCK if closing 7 days
- LOCK if closing 15 days
- LOCK if closing 30 days
- LOCK if closing 45 days
- LOCK if closing 60 days
>Related: 7 tips for getting the best refinance rate
Market Data Affecting Today’s Mortgage Rates
Here is an overview of the situation this morning around 9:50 a.m. (ET). The data, compared to around the same time yesterday, was:
- the yield on 10-year treasury bills rose slightly from 2.97% to 2.98%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular treasury yields
- Main stock indices were mostly higher shortly after opening. (Bad for mortgage rates.) When investors buy stocks, they often sell bonds, which lowers bond prices and raises yields and mortgage rates. The opposite can happen when the indices are weaker. But it’s an imperfect relationship
- Oil prices rose to $105.08 from $103.06 a barrel. (Bad for mortgage rates*.) Energy prices play a major role in creating inflation and also indicate future economic activity
- The price of gold fell to $1,850 from $1,859 an ounce. (Neutral for mortgage rates*.) It’s generally better for rates when gold goes up and worse when gold goes down. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates down
- CNN Business Fear & Greed Index – fell to 24 from 27 out of 100. (Good for mortgage rates.) “greedy” investors cause bond prices to fall (and interest rates to rise) when they leave the bond market and turn to equities, while “fearful” investors do the opposite. So lower readings are better than higher ones
* A movement of less than $20 in gold prices or 40 cents in oil prices is a change of 1% or less. We therefore only consider significant differences as good or bad for mortgage rates.
Market and rate warnings
Prior to the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the numbers above and make a pretty good guess of what would happen to mortgage rates that day. But this is no longer the case. We are still making daily calls. And are usually right. But our accuracy record won’t reach its former high levels until things stabilize.
So use the markets only as an indication. Because they have to be exceptionally strong or weak to be relied upon. But, with this caveat, mortgage rates may rise today. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.
Important Notes About Today’s Mortgage Rates
Here are some things you should know:
- Typically, mortgage rates rise when the economy is doing well and fall when it is struggling. But there are exceptions. Lily ‘How mortgage rates are determined and why you should care‘
- Only “top tier” borrowers (with great credit scores, large down payments, and very sound finances) get the ultra-low mortgage rates you’ll see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements – although they all generally follow the larger trend over time
- When daily rate changes are small, some lenders will adjust closing costs and leave their rates unchanged
- Refinance rates are generally close to purchase rates.
There’s a lot going on right now. And no one can claim to know for sure what will happen to mortgage rates in the hours, days, weeks or months to come.
Are mortgage and refinance rates going up or down?
Are we finally witnessing the start of a sustained decline in mortgage rates? Some think maybe we are.
A CNN Business ‘Before the Bell’ e-newsletter yesterday morning said:
Many Wall Street analysts believe bond prices will start rising again soon, noting that investors have likely gotten too far ahead of the Fed.
What does that mean? Mortgage rates are determined primarily by a type of bond called a “mortgage guarantee” (MBS). And, like any other type of bond, it’s a mathematical certainty that higher prices mean lower yields, which in the case of MBS also means lower mortgage rates.
Over the past several months, the MBS market has tried to price in how the Fed’s recent and continued actions to contain inflation would affect mortgage rates. And those rates rose ahead of the Fed announcements as markets priced in what they expected.
These Wall Street analysts therefore suggest that the expectations of the MBS market were worse than the reality unveiled by the Fed on May 4. This left MBS prices too low (and mortgage rates too high), and we are now seeing its unraveling.
That may be correct, even though mortgage rates rose within two days of the May 4 Fed announcements. But I am not yet convinced that we will see sustained declines in these rates. I suspect that the upward pressures caused by inflation are too powerful to allow a full reversal of the 2022 uptrend. But I hope I’m wrong.
Unfortunately, the consumer price index for April this morning will not have helped the case of these Wall Street analysts. The index was a little better than March’s, but not as good as economists had expected. And mortgage rates have risen quite sharply today.
Read the weekend edition of this daily article for more information.
For much of 2020, the general trend in mortgage rates was clearly downward. And a new weekly all-time low was set 16 times that year, according to Freddie Mac.
The most recent weekly record low occurred on January 7, 2021, when it stood at 2.65% for 30-year fixed rate mortgages.
Rates then plummeted, moving little for the next eight or nine months. But they started to increase noticeably in September. Unfortunately, they have been multiplying since the beginning of 2022.
Freddie’s May 5 report places that same weekly average for 30-year fixed rate mortgages at 5.27% (with 0.9 fees and points), at the top compared to 5.10% the previous week.
Note that Freddie expects you to buy discount points (“with 0.9 fee and points”) at close that earn you a lower rate. If you don’t, your rate will be closer to what we and others quote.
Expert Mortgage Rate Forecasts
Longer term, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each have a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates. .
And here is their current rate forecast for the last three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).
The figures in the table below are for 30-year fixed rate mortgages. Those of Fannie were published on April 19, those of Freddie on April 18 and those of the MBA on April 13.
Of course, given so many unknowables, the current crop of predictions could be even more speculative than usual. I’m afraid I’m less optimistic than any of them.
Find your lowest rate today
You should do a lot of comparison shopping no matter what type of mortgage you want. As a federal regulator, the Consumer Financial Protection Bureau states:
“Shopping around for your mortgage can save you real money. It may not seem like much, but saving even a quarter point of interest on your mortgage saves you thousands of dollars over the term of your loan.
Mortgage Rate Methodology
Mortgage reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and APR for each loan type to display in our chart. Because we average a range of prices, it gives you a better idea of what you might find in the market. In addition, we average rates for the same types of loans. For example, fixed FHA with fixed FHA. The end result is a good overview of daily rates and how they change over time.
The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising 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 company or affiliates.