Today’s mortgage and refinance rates
Average mortgage rates edged lower yesterday. It was a small drop but it inches them further toward the all-time low, though there’s still a way to go.
Key markets this morning are relatively quiet. And it’s looking as if mortgage rates today may again be unchanged or barely changed.Find and lock a low rate (Jan 22nd, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||2.75%||2.75%||Unchanged|
|Conventional 15 year fixed||2.362%||2.362%||+0.05%|
|Conventional 5 year ARM||3%||2.743%||Unchanged|
|30 year fixed FHA||2.495%||3.473%||+0.06%|
|15 year fixed FHA||2.438%||3.38%||Unchanged|
|5 year ARM FHA||2.5%||3.226%||Unchanged|
|30 year fixed VA||2.313%||2.485%||+0.01%|
|15 year fixed VA||2.313%||2.635%||+0.19%|
|5 year ARM VA||2.5%||2.406%||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.|
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?
It’s been more than a week since mortgage rates last rose. But, before that run, it had been a week since they fell. If that sounds as if those rates are in a state of flux, that’s because they are.
The mortgage market is littered with Rumsfeldian known unknowns and unknown unknowns. And, right now, nobody can get a grip on the short-term direction of travel.
Further ahead, it’s highly likely that they’ll rise. Eventually, the economy should improve significantly as vaccination programs take effect — assuming no resistant virus strains emerge. And higher government borrowing is also probable. Both those should soon push these rates higher.
But how soon is soon? March? The third quarter? That’s unknowable. So I’m leaning toward caution.
And, for now, my personal rate lock recommendations, which are little better than hunches, are:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT if closing in 60 days
Still, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut 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 about the same time yesterday morning, were:
- The yield on 10-year Treasurys held steady again at 1.11%. (Neutral 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 mixed and mostly barely moving on opening. (Neutral 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 happens when indexes are lower
- Oil prices moved down to $53.07 from $53.64 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.)
- Gold prices edged up to $1,865 from $1,863 an ounce. (Neutral 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 — Rose to 70 from 66 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. The Fed is now a huge player and some days can overwhelm investor sentiment.
So use markets only as a rough guide. They have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. But, with that caveat, so far mortgage rates today look likely to remain unchanged or barely changed.
Find and lock a low rate (Jan 22nd, 2021)
Important notes on today’s mortgage rates
Here are some things you need to know:
- The Fed’s ongoing interventions in the mortgage market (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
- 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 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
Once again, I’m expecting mortgage rates to hardly move today. But, as always, that could change as the day progresses.
This morning’s new weekly claims for unemployment insurance weren’t quite as bad as last week’s. But, at 900,000, they’re still pretty terrible. And you’d normally expect mortgage rates to fall on the news.
However, investors are currently very aware of the extra government spending (and borrowing) that the Biden administration is proposing. And that’s so far putting a brake on appreciable falls. Indeed, at some point soon, it may well cause some rises.
Over the last several months, the overall trend for mortgage rates has clearly been downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.
The most recent such record occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates are now some way above the all-time low. In Freddie’s Jan 21 report, that average was 2.77%.
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 each quarter of 2021 (Q1/21, Q2/21, Q3/21 and Q4/21).
Fannie’s were released on Jan. 15, Freddie’s on Jan. 14 and the MBA’s on Jan. 20. The numbers in the table below are for 30-year, fixed-rate mortgages:
But, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.
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:
Verify your new rate (Jan 22nd, 2021)
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.