Today’s Mortgage and Refinancing Rates
Average mortgage rates only went up a bit yesterday. But that was enough to take them to their highest level since April.
The good news is that those rates are still exceptionally low by almost all standards. Over the past 50 years, they have been lower than last night for just a few months, all since August 2021, according to Freddie Mac Archives.
Yesterday’s disappointing jobs report means they may rise more slowly for a while. But I suspect they will continue to rise next week. The bond markets will be closed for Columbus Day next Monday. So we will be back on Tuesday.
Current mortgage and refinance rates
|Program||Mortgage interest rate||APR*||Change|
|Conventional 30 years fixed||3,246%||3,263%||+ 0.09%|
|Conventional 15 years fixed||2,531%||2.56%||+ 0.05%|
|Conventional 20 years fixed||3,045%||3,079%||+ 0.03%|
|10-year fixed conventional||2,503%||2,561%||+ 0.09%|
|30 year fixed FHA||3,205%||3,967%||+ 0.05%|
|15 year fixed FHA||2,552%||3,196%||+ 0.15%|
|5/1 ARM FHA||2,406%||3,076%||-0.01%|
|30-year fixed VA||3,007%||3,199%||+ 0.05%|
|15-year fixed VA||2,725%||3,074%||+ 0.01%|
|5/1 ARM VA||2,501%||2,312%||Unchanged|
|Rates are provided by our partner network and may not reflect the market. Your rate may be different. Click here for a custom quote. See our rate assumptions here.|
COVID-19 Mortgage Updates: Mortgage lenders are changing rates and rules due to COVID-19. For the latest on how the coronavirus could affect your home loan, Click here.
Should You Lock Down a Mortgage Rate Today?
I’d lock my mortgage rate now if I were you. Of course, no one can see the future. And I may be proven wrong.
But the forces trying to push those rates up seem to me much stronger than those trying to lower them. More on the following.
Anyway, my personal recommendations remain:
- CLOSE WITH KEY if it gets closer 7 days
- CLOSE WITH KEY if it gets closer fifteen days
- CLOSE WITH KEY if it gets closer 30 days
- CLOSE WITH KEY if it gets closer Four. Five days
- CLOSE WITH KEY if it gets closer 60 days
However, with so much uncertainty right now, your instincts could easily become as good as mine, or better. So be guided by your instincts and your personal tolerance for risk.
What’s Driving Current Mortgage Rates?
All last week, I was talking about yesterday’s employment status report. The Federal Reserve had signaled that it would proceed to curtail (“curtail”) its cheap money policies (aka “quantitative easing”) starting November 3, unless that report was truly dire.
And those policies have probably been the single biggest factor keeping mortgage rates artificially low for the past 18 months. You may think that those rates are highly likely to go up once the Fed begins to remove support. In fact, recent increases are likely due in large part to signals from the Fed that it would.
So the question now is: Was the employment report so bad that the Fed will delay its November 3 phase-down announcement, perhaps six weeks or even longer? Unfortunately, that is a judgment call. And observers disagree with the implications.
The Federal Reserve may take steps to begin reducing its support for the economy next month despite a sharp slowdown in job gains last month as the latest spike in COVID-19 cases in the United States peaked. and began to back away.
– Reuters, “Fed Closes November Bond Gradual After Employment Report,” October 8, 2021.
But others, including Barron’s and Investors.com, are less certain, suggesting that a delay in phasing out was still in play.
However, the bond markets (one of which largely determines mortgage rates) voted with their feet, and yields on 10-year Treasury notes, and mortgage rates, ended the day higher than they were. they started it.
Other Forces Raising Mortgage Rates
Unfortunately, even if the Fed delays the cut, I doubt we will see sharp and sustained drops in mortgage rates. Because another driver for lower rates seems to be fading, at least for now.
Clearly, the COVID-19 pandemic was the underlying reason for the lower mortgage rates. In fact, it was that which forced the Fed to institute its cheap money policies.
And, since mid-September, the number of new infections reported in the United States has dropped significantly. Investors, who have long feared the economic fallout of the pandemic, are suddenly feeling more optimistic. And that’s bad for mortgage rates.
Meanwhile, other factors that do not favor low rates are gaining ground. For example, higher inflation is proving to be much more persistent than many expected. And that’s never good news for loan costs.
Of course, it is always possible that something will emerge that changes everything. For example, a new virulent and resistant strain of the SARS-CoV 2 virus (the virus that causes COVID-19) could emerge and reverse the current direction of the economy and mortgage rates. But let’s hope that and any other disasters of a similar scale remain unlikely.
Economic reports next week
If this week was about jobs, next week it’s mostly about inflation. And those are currently the two hot topics for investors.
If next week’s figures show inflation persisting or rising, expect more upward pressure on mortgage rates. But watch out for another important report: retail sales for September. Investors are likely to see that as an indicator of the strength of the economic recovery.
Wednesday brings the release of the minutes of the latest meeting of the Federal Open Market Committee (FOMC), the Fed’s main monetary policy body. Investors always study them carefully. But, with these minutes, they will look for more clues about the moment of the reduction.
None of the other economic reports listed below are likely to cause much movement in the markets unless it includes surprisingly good or bad data:
- Monday – Columbus Day – No reports
- Job offers from Tuesday to August
- Wednesday – September consumer price index (CPI) and underlying CPI (CPI with volatile food and energy prices excluded). In addition to the publication of the FOMC minutes (see above)
- Thursday – Producer Price Index for September. And new weekly unemployment insurance claims through October 9.
- Friday – September Import and Retail Sales Price Index. Plus the consumer confidence index for October
Watch out for Wednesdays and Fridays!
Forecast of mortgage interest rates for the next week
In general, I am waiting mortgage rates will go up again next week. But of course, with so much uncertainty, that is, at best, an educated guess.
Mortgage and refinance rates generally move in tandem. And a gap that had grown between the two has been largely eliminated by the recent scrapping of the adverse market refinance fee.
And another regulatory change, announced this week, has likely made mortgages for investment properties and vacation homes more accessible and less expensive.
How Your Mortgage Interest Rate Is Determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to equity or bond markets) where mortgage-backed securities are traded.
And that largely depends on the economy. Therefore, mortgage rates tend to be high when things are going well and low when the economy is in trouble.
But you play a role in determining your own mortgage rate in five ways. And it can significantly affect you by:
- Looking for the best mortgage rate – They vary widely from one lender to another.
- Increase in your credit score: Even a small increase can make a big difference in your rate and payments
- Saving the Biggest Down Payment You Can – Lenders like that you have real skin in this game
- Keep your other loans modest – The lower your other monthly commitments, the higher the mortgage you can afford
- Choose your mortgage wisely – are you better off with a conventional, FHA, VA, USDA, jumbo, or other loan?
The time invested in getting these ducks in a row can earn you lower rates.
Remember, it is not just a mortgage rate
Be sure to count all future homeownership costs when calculating the amount of the mortgage you can afford. So focus on your “PITI”. That’s his Principal (pays the amount you borrowed), Iinterest (the price of the loan), (property) Ty axes (owners) Isafe. Our mortgage calculator can help with these.
Depending on your type of mortgage and the amount of your down payment, you may also have to pay for mortgage insurance. And that can go up to three figures every month.
But there are other potential costs. Therefore, you will have to pay homeowners association fees if you choose to live somewhere with an HOA. And wherever you live, you should expect repair and maintenance costs. There is no landlord to call when things go wrong!
Finally, you will find it hard to forget about closing costs. You can see those reflected in the Annual Percentage Rate (APR) that will be quoted to you. Because that effectively spreads them over the term of your loan, making it higher than your direct mortgage rate.
But you may be able to get help with those closing costs. and your down payment, especially if you are a first time buyer. Read:
Mortgage rate methodology
Mortgage reports receive rates based on selected criteria from multiple lending partners each day. We came up with an average rate and APR for each type of loan to show on our graph. Because we average a variety of rates, it gives you a better idea of what to find on the market. Also, we average rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good snapshot of daily rates and how they change over time.