Mortgage And Refinance Charges At the moment, Aug. 18
Today’s mortgage and refinancing rates
Average mortgage rates were stable yesterday. They are still higher than they were at the beginning of the month. But recent falls have taken the edge off. And they are exceptionally low to the most extraordinary standards.
So far this morning it looks like it is Mortgage rates could be unchanged or hardly changed today. But there’s a danger point at 2 p.m. ET when the Federal Reserve releases a highly anticipated document. More on this below.
Find and lock a cheap rate (August 22, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||Change|
|Conventionally fixed for 30 years||2,749%||2,749%||-0.02%|
|Conventionally fixed for 15 years||1.99%||1.99%||Unchanged|
|Conventional 20 years old||2,377%||2,377%||-0.11%|
|Conventionally fixed for 10 years||1,851%||1,885%||Unchanged|
|30 years permanent FHA||2,688%||3,343%||Unchanged|
|15 years fixed FTA||2,381%||2,981%||Unchanged|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 years of permanent VA||2.25%||2,421%||Unchanged|
|15 years fixed VA||2.25%||2,571%||Unchanged|
|Prices are provided by our partner network and may not reflect the market. Your rate can be different. Click here for an individual price offer. View our rate assumptions here.|
Find and lock a cheap rate (August 22, 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?
Of course, you don’t want to lock in while mortgage rates are falling. But you should think about it when they start to rise.
Because few experts believe these rates are likely to go down much further. And most expect it to rise. So your likely rewards for continuing to float are small. But your risks are great.
My personal rate lock recommendations remain for the time being:
- LOCK when close in 7th Days
- LOCK when close in fifteen Days
- LOCK when close in 30th Days
- HOVER when close in 45 Days
- HOVER 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.
Market Data Affecting Mortgage Rates Today
Here’s a snapshot of the score this morning at around 9:50 a.m. ET. The dates compared to about the same time yesterday were:
- the 10 year Treasury note yield increased from 1.25% to 1.27%. (Bad for mortgage rates.) More than any other market, mortgage rates usually follow these particular government bond yields
- Important stock indices were lower shortly after opening. (Good for mortgage rates.Often times, when investors buy stocks, they sell bonds, which depresses the prices of those stocks and increases yields and mortgage rates. The opposite can happen when the indices are lower
- Oil prices rose to $ 66.78 from $ 67.51 a barrel. (Good for mortgage rates *.) Energy prices play a major role in the development of inflation and also indicate future economic activity.
- Gold prices fell to $ 1,788 from $ 1,793 an ounce. (Neutral for mortgage ratesIn general, it is better for interest when gold rises and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to cut rates
- CNN Business Fear and Greed Index – fallen from 37 to 31 From 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) when they exit the bond market and invest in stocks, while “fearful” investors do the opposite. So lower values are better than higher
* A change of less than $ 20 in gold prices or 40 cents in oil prices is a fraction of 1%. Therefore, when it comes to mortgage rates, we only count meaningful differences as good or bad.
Reservations about markets and prices
Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the numbers above and make a pretty good guess as to what would happen to mortgage rates that day. But that is no longer the case. We still use the phone every day. And they are mostly right. But our record for accuracy won’t hit its old highs until things settle down.
Use markets only as a rough guide. Because they have to be exceptionally strong or weak to be able to rely on them. But with this reservation so far Mortgage rates are likely to remain stable today or be just a few inches on either side of the neutral line. Note, however, that “intraday swings” (when prices change direction during the day) are a common feature these days.
Find and lock a cheap rate (August 22, 2021)
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. And a recent regulatory change has closed a pre-existing loophole
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 forth
The big event today is likely to be the release of the minutes of the final meeting of the Federal Reserve’s Open Market Committee (FOMC) at 2 p.m. ET. This is the Federal Reserve’s monetary policy organ.
Investors and analysts always pore over these minutes in hopes of glimpsing the Fed’s mindset. But today’s release could cause more excitement than usual.
Because the insights it could contain this time concern “tapering”, the process of slowing down and ending the current Fed asset purchase program. Right now it is buying $ 120 billion a month in bonds.
What does this have to do with mortgage rates?
As regular readers know, $ 40 billion of that $ 120 billion is spent on mortgage-backed securities (MBSs), a type of bond that largely determines mortgage rates. And buying in these quantities keeps these prices artificially low.
Nobody believes that today’s minutes will reveal the Fed’s expanding master plan. And it’s becoming increasingly clear that the central bank will start tapering sometime this year, maybe next month, or even this month. The expectations are therefore already within a limited framework.
But the markets are hungry for information that will give them a better idea of a likely date. And if this afternoon’s release provides for that, they could react, perhaps with higher mortgage rates. If it doesn’t, the minutes could be a wet squib.
For more background information, see Saturday’s weekend edition of this column.
Mortgage Rates and Inflation: Why Are Rates Rising?
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 hit on January 7th at 2.65% for 30-year fixed-rate mortgages. But then the trend was reversed and interest rates rose.
However, these increases have been largely replaced by decreases since April, albeit typically small. Freddie’s August 12 report builds on this weekly average 2.87% (with 0.7 Fees and points), high from 2.77% 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 (Q3 / 21 and Q4 / 21) and the first two quarters of 2022 (Q1 / 22 and Q2 / 22).
The numbers in the table below are for 30-year fixed-rate mortgages. Fannies were updated on July 19, Freddies on July 15, and the MBAs on July 21.
|Forecasters||Q3 / 21||Q4 / 21||Q1 / 22||Q2 / 22|
However, with so many imponderables, current forecasts could be even more speculative than usual.
All of these predictions anticipate higher mortgage rates soon. But the differences between the forecasters are stark. And Fannie may not be involved in curbing Federal Reserve mortgage support while Freddie and the MBA do.
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 price (August 22, 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. Since we average a range of prices, 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.