Mortgage And Refinance Charges At present, July 8
Today’s mortgage and refinancing rates
Average mortgage rates fell noticeably yesterday. They are still not as low as they were just before the peak in mid-June. But now they are very close.
It’s a fun (weird, not ha-ha) morning in markets. And Mortgage rates could continue to fall today. But strange markets are unsafe.
Find and lock a cheap rate (July 9, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,811%||2,811%||Unchanged|
|Conventionally fixed for 15 years||2.125%||2.125%||Unchanged|
|Conventional 20 years old||2,625%||2,625%||Unchanged|
|Conventionally 10 years fixed year||1,944%||1,966%||-0.01%|
|30 years permanent FHA||2,684%||3,339%||Unchanged|
|15 years fixed FTA||2.42%||3.02%||-0.06%|
|5/1 ARM FHA||2.5%||3,207%||-0.01%|
|30 years of permanent VA||2,255%||2,426%||+ 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 9, 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?
Anyone who was still floating yesterday has something to celebrate. And mortgage rates are now near the bottom of the tight range they have been in for months.
That’s great. But even seasoned analysts are wondering about yesterday’s decline (see below). And there is no guarantee that it will last long. Meanwhile, of course, most expert watchers expect mortgage rates to rise soon. So my personal rate lock recommendations have to 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’s minutes of the last meeting of the Federal Reserve’s Open Market Committee (FOMC) said what I feared. The FOMC decides on the Fed’s interest rates and monetary policy. And that policy includes asset purchases. Currently, that policy is to purchase $ 40 billion worth of mortgage-backed securities every month. And that keeps mortgage rates artificially low.
The minutes showed that the FOMC had positioned itself to slow down all of its bond purchases. Reuters stated yesterday:
In minutes that reflected the Fed’s split struggle with new inflation risks but still relatively high unemployment, there were “various participants” at the meeting on June 15-16. June believes the conditions for a reduction in the central bank’s bond purchases will be “met a little earlier than expected”.
– Reuters, “Fed wants to be ‘well positioned’ to react to inflation, other risks, minutes show,” July 7, 2021
Egg on my face
I thought the Fed, which is considering cutting asset purchases (and maybe raising rates), would raise mortgage rates. Well, I’ve got an egg on my face this morning.
But in my defense, so did many others. MarketWatch reported yesterday:
So far, yields at the longer end of the yield curve have slid down, which puzzles some analysts as concerns about persistent inflation and ultimately higher bond yields are theoretically bearish.
– MarketWatch, “10-year government bond yields slide to February lows as Fed signals readiness to cut,” July 7, 2021
And MarketWatch made it clear in the same article that mortgage-backed securities were very much targeted by some committee members. It read: “Some Fed members advocated starting tapering by reducing the Fed’s monthly purchases of $ 40 billion in mortgage-backed securities because the glowing real estate market doesn’t need the support. Other members felt that cuts should be made across the board. “
To be honest, it still amazes me why mortgage rates fell instead of rising yesterday. We all know that markets can sometimes act unpredictably. But that seemed downright perverse.
The last time the Fed had an asset purchase program and signaled it was about to “taper” it was in 2013. And then mortgage rates soared in what became known as the taper tantrum .
Maybe someone has a rational explanation for what happened yesterday. And if I come across it, I’ll report it tomorrow or as soon as possible.
But in the meantime, I can only recommend that you enjoy yesterday’s moves with caution. Perhaps when they have fully digested the effects of the Fed Protocol, investors will reconsider it.
Though first thing this morning it looked unlikely that it would happen today.
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.
Recently – Updated today
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, these increases were largely replaced by decreases in April and beyond, if only to a minor extent. 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 9, 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.