Mortgage And Refinance Charges At the moment, July 6
Today’s mortgage and refinancing rates
Average mortgage rates fell again last Friday, which was a good way to start the long weekend. But overall they are slowly drifting back down – after those sharp rises in mid-June – into the narrow range they have been in for months.
Judging by the early moves in key markets, Mortgage rates could go down today. But, as always, events in the hours to come could undermine that prediction.
Find and lock a cheap rate (July 6, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,929%||2,929%||Unchanged|
|Conventionally fixed for 15 years||2.25%||2.25%||Unchanged|
|Conventional 20 years old||2,625%||2,625%||Unchanged|
|Conventionally 10 years fixed year||1,944%||1,972%||-0.01%|
|30 years permanent FHA||2,695%||3,351%||Unchanged|
|15 years fixed FTA||2.5%||3,101%||+ 0.13%|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 years of permanent VA||2,343%||2,515%||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 (July 6, 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?
Last week has been a relatively good week for mortgage rates. And today the downward trend is likely to continue. So you might want to keep sharing your course today.
However, the risks of doing this over a long period of time remain relatively high. Most experts expect mortgage rates to rise soon. So 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) 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
In the past few months, I may have created the impression that I think higher mortgage rates are inevitable. But of course they are not. Yes, they are still very likely. But nothing is certain.
And today we saw evidence from Europe that global recovery may be less certain than many believe. That doesn’t necessarily mean the US recovery will stall. But our economy is closely related to the foreign one. And we could struggle to meet our high forecast growth numbers if others cannot buy our goods and services.
The Federal Statistical Office of the Federal Government published its latest figures on incoming orders in the manufacturing sector this morning. And they were down 3.7% in May. Most economists had forecast an increase of 1% or more.
What caused this disappointing number? Well, there are likely several factors including falling heavy machinery demand and lower overseas orders. And even well-known German car manufacturers have problems with their supply chains.
UK embraces coronavirus
Meanwhile, the UK Government’s Health Secretary also agreed this morning that it would be “breaking new ground” if it carried out plans to fully (well, almost) normalize life from July 19th. In a radio interview, Sajid Javid said the UK daily infection rate could top 100,000 due to the lifting of restrictions later in the year.
The UK government is betting that its high vaccination rate will limit hospital stays and deaths. According to Our World in Data, by July 4, 68 percent of the population had received at least one dose of vaccine.
The UK of course reserves the right to reintroduce infection prevention measures. However, critics fear that lifting almost all restrictions could be more problematic than Secretary of State Javid thinks. And that includes the risk that Great Britain will become a petri dish for new variants.
What that means for mortgage rates
All of this does not mean that the US economic recovery will not continue unabated. But investors view risks like this (and countless others) with caution. And that may explain, in part, why mortgage rates remain low.
Overall, however, high growth in the US is still likely in 2021. And that will almost certainly lead to higher mortgage rates soon. Unless things go terribly wrong …
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 hit on January 7th at 2.65% for 30-year fixed-rate mortgages. But then the trend was reversed and interest rates rose.
However, those rises were largely replaced by falls in April, although these moderated in the second half of this month. Meanwhile, May saw declines that slightly outweighed the increases. Freddie’s July 1 report puts that weekly average at 2.98% (with 0.6 fees and points). Low from 3.02% 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 rate today
Some lenders have been terrified by the pandemic. And they are limiting 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 6, 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.