Mortgage And Refinance Charges As we speak, July 9
Today’s mortgage and refinancing rates
Average mortgage rates fell yesterday. And they are now at their lowest point in the last month.
However, this morning there were signs that this happy situation may not last. And Mortgage rates are likely to rise today, probably moderately.
Find and lock a cheap rate (July 10, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,808%||2,808%||Unchanged|
|Conventionally fixed for 15 years||2.125%||2.125%||Unchanged|
|Conventional 20 years old||2,491%||2,491%||-0.13%|
|Conventionally 10 years fixed year||1,944%||1,975%||+ 0.01%|
|30 years permanent FHA||2,612%||3,264%||-0.08%|
|15 years fixed FTA||2,437%||3,038%||+ 0.02%|
|5/1 ARM FHA||2.5%||3,207%||Unchanged|
|30 years of permanent VA||2.25%||2,421%||-0.01%|
|15 years fixed VA||2.25%||2,571%||Unchanged|
|Prices are provided by our partner network and may not reflect the market. Your price can be different. Click here for an individual price offer. View our rate assumptions here.|
Find and lock a cheap rate (July 10, 2021)
COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To learn how the coronavirus could affect your home loan, click here.
Should You Lock A Mortgage Rate Today?
If you’re still floating, then you need to weigh the likely risks and rewards. And these have changed in the last few days as markets reacted to economic news in unexpected ways (more below).
Personally, I still think higher mortgage rates are more likely than further sharp declines in the coming weeks. But I’m less sure about that than I was at the beginning of the week. So I wouldn’t blame you if you’d rather wait and see – although you might be in pain today. Just be ready to lock if you suddenly need it.
However, my personal rate lock recommendations must remain:
- LOCK when close in 7th Days
- LOCK when close in fifteen Days
- LOCK when close in 30th Days
- LOCK when close in 45 Days
- LOCK when close in 60 Days
However, I do not claim to have perfect foresight. And your personal analysis could be as good as mine – or better. So you can be guided by your instincts and your personal willingness to take risks.
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Important information about current mortgage rates
Here are some things you need to know:
- Usually mortgage rates go up when the economy is doing well and go down when the economy is in trouble. But there are exceptions. Read ‘How Mortgage Rates Are Determined and Why You Should Care About It
- Only “top notch” borrowers (with great credit scores, high down payments, and very healthy finances) will get the extremely low mortgage rates you see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily price action – though they usually all follow the broader trend over time
- When the daily price changes are small, some lenders adjust the closing costs and leave their price lists unchanged
- The refinancing rates are usually close to those for purchases. However, some types of refinancing are higher after a regulatory change
So there is a lot going on here. And no one can claim to know for sure what will happen to mortgage rates in the coming hours, days, weeks, or months.
Are mortgage and refinancing rates rising or falling?
today and so on
Yesterday I promised to let you know if I had any credible theories as to why the markets deterred – even perverted – the US Federal Reserve’s release of the minutes of the last meeting of its most important political body, the Federal Reserve Open Markets Committee have (FOMC).
Well, if there is consensus, it is that they found something else to worry about. And those were the possible effects of the COVID-19 pandemic on the global economy. Other related concerns include supply chain bottlenecks holding back productivity and an apparent slowdown in Chinese growth.
Of course, there are good reasons to fear the coronavirus. For example, the Delta variant turns out to be more contagious and harmful than previous strains. And there is always the possibility that an epsilon variant will show up that could be even worse.
Meanwhile, the number of known cases worldwide reached 4 million yesterday. Given the scarcity of testing in many parts of the world, that’s likely a grotesque underestimation.
And in an interview published today in the Financial Times, the President of the Federal Reserve Bank of San Francisco Mary Daly said:
I think one of the biggest risks to our future global growth is that we declare victory over COVID-19 ahead of time.
It may be that the markets beat them on this conclusion. And that’s why mortgage rates have plummeted in the past few days. However, it is difficult to discern the event or news that caused such an extreme and sudden change in mood.
Taper tantrum is still a real danger
In the same FT interview, Ms. Daly said, “We are ready to cut at the right time.” And that the Fed would wait for the effects of tapering before raising interest rates.
That could mean significantly higher mortgage rates. Because in 2013 the Fed tried to “shorten” (gradually reduce) its bond purchases. Then as now, it bought mortgage-backed securities (MBS) in shiploads, keeping mortgage rates artificially low. And when it signaled that it would cut back on those purchases, mortgage rates rose sharply and suddenly in what is known as a “taper tantrum.”
Lower mortgage rates remain possible
Of course, if there really was a COVID-19 resurgence enough to undermine the recovery in the US and the global economy, the Fed wouldn’t have to throttle anything. And mortgage rates would fall, perhaps to new all-time lows. But that would likely trigger a recession or even depression as well. None of us want that.
How likely is that? Nobody really knows. But for now, the markets seem to be taking the threat seriously. Of course, they can change their collective minds soon, maybe very soon.
Mortgage Rates and Inflation: Why Are Rates Rising?
For more background information, see the weekend edition of this Saturday column, which offers more space for in-depth analysis.
The general trend in mortgage rates was clearly declining for much of 2020. And according to Freddie Mac, a new weekly all-time low was hit 16 times in the past year.
The latest weekly record low was recorded on January 7th when it was 2.65% for 30-year fixed-rate mortgages. But then the trend was reversed and interest rates rose.
However, in April and since then, those increases have been largely replaced by decreases, if only marginally. Freddie’s July 8th report puts that weekly average at 2.9% (with 0.6 fees and points). Low from 2.98% the previous week.
Expert predictions for mortgage rates
Looking ahead, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) each have a team of economists devoted to monitoring and forecasting developments in the economy, real estate and mortgage rates.
And here are their current interest rate forecasts for the remaining quarters of 2021 (Q2 / 21, Q3 / 21, Q4 / 21) and the first quarter of 2022 (Q1 / 22).
The numbers in the table below are for 30-year fixed-rate mortgages. Fannies were updated on June 16 and the MBAs on June 18. Freddie’s forecast is dated April 14th, but it is now only updated quarterly. So his numbers look out of date.
|Forecasters||Q2 / 21||Q3 / 21||Q4 / 21||Q1 / 22|
However, with so many imponderables, current forecasts could be even more speculative than usual.
Find your lowest price today
Some lenders have been terrified by the pandemic. And they limit their offerings to vanilla-flavored mortgages and refinancing.
But others remain brave. And you can still likely find the refinance, investment mortgage, or jumbo loan you want. All you have to do is look around.
But of course, no matter what type of mortgage you want, you should compare widely. As a federal regulator, the Consumer Financial Protection Bureau says:
Shopping for your mortgage has the potential to result in real savings. It may not sound like much, but if you save only a quarter point in interest on your mortgage, you will save thousands of dollars over the life of your loan.
Confirm your new plan (July 10, 2021)
Mortgage rate methodology
The mortgage report receives interest rates from several credit partners on a daily basis according to selected criteria. We’ll find an average interest rate and an APR for each type of loan shown on our chart. By averaging a number of rates, this will give you a better idea of what you might find in the market. In addition, we determine average interest rates for the same types of credit. For example FHA fixed with FHA fixed. The end result is a good snapshot of the daily rates and how they change over time.