Mortgage And Refinance Charges Right now, July 7
Today’s mortgage and refinancing rates
Average mortgage rates fell yesterday. It wasn’t anything dramatic. But it was welcome anyway.
Things looked good first for these prices. However, the Federal Reserve will release a key document this afternoon at 2 p.m. ET (more on this below). And its content could make mortgage rates go up or down – or leave them unchanged. So I have to say that Mortgage rates are unpredictable today.
Find and lock a cheap rate (July 8, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,811%||2,811%||-0.12%|
|Conventionally fixed for 15 years||2.125%||2.125%||-0.13%|
|Conventional 20 years old||2,625%||2,625%||Unchanged|
|Conventionally 10 years fixed year||1,944%||1,977%||+ 0.01%|
|30 years permanent FHA||2,684%||3,339%||-0.01%|
|15 years fixed FTA||2,479%||3.08%||-0.02%|
|5/1 ARM FHA||2.5%||3.213%||Unchanged|
|30 years of permanent VA||2.25%||2,421%||-0.09%|
|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 8, 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?
There’s no reason why you shouldn’t keep floating while mortgage rates are gently drifting down from their mid-June peak. However, the Fed is releasing an important document this afternoon (see below) that could – possibly – change the direction of these rates. So this is an additional risk to consider.
And be aware that the recent downward moves could reverse at any time. In fact, most in the mortgage industry and beyond expect these rates to rise pretty 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.
id = “click_table_60e6dec4adc8c”>
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
The Financial Times this morning had the headline: “10-year government bond yield drops to its lowest level in four months”. This is good because mortgage rates often closely track these returns. But why the fall?
The FT goes on to explain what it thinks the driver is. Investors are deviating from the idea that the Federal Reserve will be forced to end its stimulus program early. Or in his words: “Traders cut bets on a tighter Fed policy”.
Let’s avoid a serious dental exam for this particular gift horse. But let’s not fool ourselves that our horse will necessarily live a long time. Because there’s a chance it won’t survive this afternoon at 2 p.m. ET.
At that time, the Fed publishes the minutes of the last meeting of its main political body, the Fed’s Open Market Committee, or FOMC. Yesterday investors bet that these minutes revealed a relatively “reluctant” committee with a wait and see approach. But if they instead reveal an increasingly “hawkish” and many committee members advocate tougher measures soon, mortgage rates could rise.
So today is another cliffhanger day. Mortgage rates can go up or down in those minutes. But we won’t know which ones until after they’re released. And there’s always the chance that they won’t say anything unexpected, in which case these courses can barely move.
The meeting recorded in these minutes was too long for members of the committee to take into account the recent surge in oil and gas prices. Last night the New York Times stated:
West Texas Intermediate, the US oil price benchmark, hit $ 76.98 a barrel on Tuesday, its highest level in six years as OPEC, Russia and its allies again failed to agree on production increases. Prices moderated later in the day but remained nearly $ 10 a barrel higher than in mid-May.
– NYT, “Rising Oil and Gas Prices Add To US Economic Challenges”, (Paywall) June 6, 2021
At the moment, the Fed firmly believes that inflation will prove to be a temporary phenomenon. However, the Times article goes on to say, “… if rising oil prices lead consumers and businesses to believe that faster inflation will persist, this could be a more difficult problem for the Fed.”
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, 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 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 8, 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.