Today’s mortgage and refinance rates
Average mortgage rates plummeted yesterday, reaching a three-month low. I occasionally reach for the roller coaster metaphor during times of wild volatility. But this is more like a ride on NASA’s vomit comet.
And the ride continues. Because mortgage rates today look likely to rise, perhaps significantly. That followed excellent job numbers earlier. Of course, it’s always the case that those rates could change direction as the day progresses.
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||5.25%||5.284%||-0.16%|
|Conventional 15 year fixed|
|Conventional 15 year fixed||4.723%||4.781%||-0.11%|
|Conventional 20 year fixed|
|Conventional 20 year fixed||5.239%||5.296%||-0.12%|
|Conventional 10 year fixed|
|Conventional 10 year fixed||4.847%||4.932%||-0.08%|
|30 year fixed FHA|
|30 year fixed FHA||5.254%||6.024%||-0.05%|
|15 year fixed FHA|
|15 year fixed FHA||4.976%||5.46%||-0.1%|
|30 year fixed VA|
|30 year fixed VA||4.812%||5.027%||-0.34%|
|15 year fixed VA|
|15 year fixed VA||4.923%||5.29%||-0.05%|
|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.
I attempt an explanation for what’s happening to mortgage rates in a minute. But, for now, let’s just say the last six business days have seen record or near-record falls, rises and falls again. In other words, we’re in a period of unprecedented volatility. And that means unprecedented uncertainty. Mortgage rates could continue lower or climb again without warning, in both cases by significant amounts.
All this means you have to rely even more than usual on your own tolerance for risk. If you’re cautious, by all means, lock your rate now, no matter how long you have before closing.
In the meantime, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- FLOAT if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT 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 2.84% from 2.68%. (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 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 tumbled to $88.21 from $94.16 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
- Gold prices fell to $1,786 from $1,797 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 — held steady at 49 out of 100. (Neutral 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 look likely to rise, perhaps sharply. 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?
Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment.— Freddie Mac, Aug. 4, 2022
I carried forward that quote from yesterday because it bears repeating. It sums up what I wrote 24 hours ago.
This is all about changing market sentiment: Are investors more scared of a recession or inflation? Right now, they can’t make up their minds.
According to CNBC, Germany’s predicament may be behind yesterday’s precipitous fall in mortgage rates. It says that US Treasury bonds and notes (to which those rates are closely related) are currently shadowing German government bunds (bonds).
Germany has the world’s fourth-largest economy. And it currently faces an extraordinary threat to its prosperity owing to its reliance on Russian natural gas. The flow of gas has been severely restricted in retaliation for German sanctions over Russia’s war in Ukraine. And, as the weeks tick by to winter, when demand will certainly grow, many fear an incalculable economic catastrophe.
In today’s interconnected, globalized world, the US economy would not escape the consequences. And this is raising fears of a recession here.
This may be a credible explanation. Domestically, economic reports earlier this week have tended to be better than expected, with car sales, purchasing manager indexes (PMIs) and factory orders all beating forecasts. So, if there’s a heightened fear of a recession, it may well have foreign roots.
This morning saw the publication of the official employment situation report for July. Before the figures were announced, economists polled by MarketWatch expected the headline figure (“nonfarm payrolls,” meaning new jobs) to be 258,000 that month.
That’s important because investors tend to trade ahead of announcements on the basis of such expectations. And it’s the difference between those expectations and reality that drive changes in markets that day.
In the event, this morning’s actual figure was an extraordinary 528,000 new jobs — more than twice the forecast. When The New York Times reported the figure, it said: “The blistering pace of hiring in the US continued in July ... The impressive performance indicates that a slowdown in some industries has not been enough to drag down overall hiring, and it provides new evidence that the United States has not entered a recession.” The unemployment rate inched lower to 3.5%, matching the record low seen just before the pandemic.
If fears of recession recede on those figures, fears of inflation might come into focus again, pushing mortgage rates higher. Indeed, that was already happening first thing this morning. And the fact that strong jobs growth might embolden the Federal Reserve to implement another big rate hike next month won’t have helped.
But next Wednesday brings July’s consumer price index (CPI). If that shows signs of cooler inflation, it could drive mortgage rates lower again. However, I wouldn’t hold my breath.
I must repeat what’s become a regular warning recently. Big rises often follow big falls — and vice versa. We’ve already seen two up-and-down bounces in a matter of days. And they’re not necessarily over yet.
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 and June were kinder months.
Freddie’s Aug. 4 report puts that same weekly average for conventional, 30-year, fixed-rate mortgages at 4.99% (with 0.8 fees and points), down from the previous week’s 5.3%. However, note that this report misses most of that Tuesday’s and all of that Wednesday’s dramatic rises.
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 two quarters of 2022 (Q3/22, Q4/22) and the first two quarters of next year (Q1/23, Q2/23).
The numbers in the table below are for 30-year, fixed-rate mortgages. The latest forecasts all appeared around Jul. 21.
Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
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.