Today’s mortgage and refinance rates
Average mortgage rates just inched higher yesterday. They’ve strayed some way from their all-time low, which was visited again on Monday. But they remain in the uberlow range.
This morning’s employment data for December was much worse than expected. And normally, that would trigger a significant fall. But perhaps not today. Because mortgage rates may rise yet again today.
Find and lock a low rate (Jan 10th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed||2.75%||2.75%||-0.06%|
|Conventional 15 year fixed||2.313%||2.313%||-0.19%|
|Conventional 5 year ARM||3%||2.743%||Unchanged|
|30 year fixed FHA||2.438%||3.415%||Unchanged|
|15 year fixed FHA||2.313%||3.253%||Unchanged|
|5 year ARM FHA||2.5%||3.226%||Unchanged|
|30 year fixed VA||2.308%||2.479%||+0.06%|
|15 year fixed VA||2.063%||2.382%||Unchanged|
|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.|
Find and lock a low rate (Jan 10th, 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?
I would. Mortgage rates are higher and still appear to be heading upward.
Nevertheless, it looks as if I’m going to have to eat some humble pie. The sharply higher rates that I anticipated haven’t materialized. Yes, they’re up and probably still rising. But not as much as I expected.
Often, investors position themselves ahead of changes by buying or selling early in response to looming threats or opportunities. But current signs suggest they’re not doing so in any extreme way in response to the Democratic Party’s clean sweep of the White House and both houses of Congress.
Had they done so, US Treasury bond yields (and the mortgage rates that often shadow them) would have risen even further. But it looks as if investors are largely waiting until the extra demand for government debt (and the extra supply of those Treasury bonds) actually arises.
And, even then, the economic impact of the pandemic might moderate — or even cancel out — those rises, at least for the months between now and a return to normalcy. When that happens, expect much higher mortgage rates.
When it comes to rate forecasts, I rarely regret an overabundance of caution. And those who took my advice quickly will have locked at a record low.
But today I’m scaling back my pessimism. And my personal rate lock recommendations are changing again:
- 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 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 rose to 1.09% from 1.07%. (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 on 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 happens when indexes are lower
- Oil prices rose to $51.58 from $50.67 a barrel. (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.)
- Gold prices fell to $1,872 from $1,912 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 — Jumped to 71 from 65 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 they’re looking likely to move higher today.
Find and lock a low rate (Jan 10th, 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?
I’m expecting mortgage rates to rise again today.
And that’s in spite of this morning’s official employment situation report for December. In the current circumstances, many regard that as the single most important monthly economic report.
And this morning’s report showed a loss of 140,000 jobs in December, the first fall since April. Analysts had expected a gain of 50,000, which itself would have looked bad compared with November’s +245,000. Still, the unemployment rate remains unchanged at 6.7%.
This suggests the economic consequences of the pandemic are beginning to bite again as new cases, hospitalizations and deaths surge. And that the growth in gross domestic product and employment that we need to get back to the time immediately preceding COVID 19 is stalling.
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. But that’s already been overtaken by events. And rates are now appreciably higher.
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).
However, note that Fannie’s (released on Dec. 15) and the MBA’s (Dec. 21) are updated monthly. But Freddie’s are now published quarterly. And its latest was released on Oct. 14. So that’s looking distinctly stale.
The numbers in the table below are for 30-year, fixed-rate mortgages:
So predictions vary considerably. You pays yer money …
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 (Jan 10th, 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.