Today’s mortgage and refinance rates
Average mortgage rates just edged a little lower yesterday. Still, they set a new recent low and inched closer to the all-time low.
But it’s looking this morning as if that party may be over — at least for now. Because mortgage rates today look likely to rise.
Find and lock a low rate (Jul 21st, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||2.693%||2.693%||+0.01%|
|Conventional 15 year fixed||1.99%||1.99%||Unchanged|
|Conventional 20 year fixed||2.391%||2.391%||+0.02%|
|Conventional 10 year fixed||1.851%||1.863%||Unchanged|
|30 year fixed FHA||2.573%||3.225%||+0.01%|
|15 year fixed FHA||2.371%||2.97%||-0.03%|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 year fixed VA||2.25%||2.421%||Unchanged|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|5/1 ARM VA||2.492%||2.389%||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.|
Find and lock a low rate (Jul 21st, 2021)
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?
Mortgage rates remain unpredictable. But stocks bounced higher yesterday and it would be no surprise if those rates followed suit today. I’m not suggesting that they’ll lose all the ground they acquired over the last week. But markets often end sharp changes with movements in the opposite direction of travel.
Clearly, markets are spooked. And, if their fears turn out to be correct, these rates may have further to fall. But few economic data have so far provided grounds for those fears. So, if more bad numbers don’t arrive soon, we may see consistently rising rates.
And my personal rate lock recommendations must 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
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 rose to 1.27% from 1.16%. (Very bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
- Major stock indexes were higher shortly 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
- Oil prices rose to $69.19 from $66.08 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 $1,801 from $1,826 an ounce. (Bad 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 — climbed to 23 from 16 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 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, so far mortgage rates today look likely to rise, in spite of all those “good for mortgage rates” entries. 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 (Jul 21st, 2021)
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. But some types of refinances are higher following a regulatory change
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
Writing yesterday for The New York Times, Yale economist and Nobel laureate Paul Krugman explored what’s been happening in markets over the last week. And he wondered whether this might be a repeat of Oct. 19, 1987, when the Dow plummeted almost 23% in that one day. He recalled how financial journalists had tried to pin down a reason for the fall, coming up with several possible rationales. Professor Krugman continued:
But Robert Shiller of Yale University (a future Nobel laureate) was uniquely positioned to figure out what had actually happened. He had been conducting surveys of investor behavior and had a list of fax numbers that allowed him to ask a wide range of investors, just hours after the plunge, what had motivated them to sell. And he found essentially no evidence for any of the rationales offered after the fact. For the most part, investors attributed their decision to sell to the fact that … stock prices were falling. It was basically a self-reinforcing panic. I bring up this old story as a caution against taking any efforts to explain yesterday’s stock price decline too seriously.
NYT e-newsletter, Paul Krugman Opinion, Jul. 20, 2021
And, of course, it wasn’t just Wednesday’s sharp falls in a number of markets to which that story applies. The last week has seen similarly irrational behavior. Indeed, you could argue that the last several months have seen milder versions of the same thing.
That’s why, in Saturday’s Weekend edition, I quoted CNBC’s Friday report that spoke of the bond market not “following the script” and “defying Wall Street forecasters” with its “mystifying” behavior.
Market mysteries are dangerous
Now, I have to hold up my hands and admit that some of the reason I’m telling you this is to deflect blame from me for getting things wrong. I’ve been predicting higher mortgage rates for months.
But the main reason is to warn you that markets that are “mystifying” are inherently dangerous. Because they’re as fickle as they are unpredictable.
I certainly wouldn’t blame you for surfing the downward wave that has seen much lower mortgage rates. Why wouldn’t you?
But, if you continue to do so, you need to be ready to lock in an instant. Because current markets could turn at any moment. And the forces that would normally push mortgage rates higher are still active and strong.
Mortgage rates and inflation: Why are rates going up?
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 in April and since, though only small ones. Freddie’s July 15 report puts that weekly average at 2.88% (with 0.7 fees and points), down from the previous week’s 2.90%. And it’s highly likely they’ll be lower still come Thursday’s release.
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 rates 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 June 18.
However, given so many unknowables, the current crop of forecasts might be even more speculative than usual.
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 (Jul 21st, 2021)
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.