Average mortgage rates fell again yesterday, though much more modestly than they did last Friday.
So far this morning, markets are signaling that mortgage rates today might move higher. But the momentum was not strong and could change later in the day.
|Conventional 30 year fixed||6.359%||6.393%||-0.02%|
|Conventional 15 year fixed||5.473%||5.528%||-0.01%|
|Conventional 20 year fixed||6.074%||6.131%||-0.01%|
|Conventional 10 year fixed||5.695%||5.817%||-0.03%|
|30 year fixed FHA||6.12%||6.862%||+0.03%|
|15 year fixed FHA||5.659%||6.152%||Unchanged|
|30 year fixed VA||6.091%||6.324%||+0.03%|
|15 year fixed VA||6.122%||6.48%||-0.12%|
|Conventional 5 year ARM||6.399%||6.753%||-0.05%|
|5/1 ARM FHA||6.399%||7.007%||-0.05%|
|5/1 ARM VA||6.399%||7.007%||-0.05%|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
Don't lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don't change daily to reflect fleeting sentiments in volatile markets.
Keep reading for my main reason for not yet changing my personal rate lock recommendations, which for now remain:
Here's a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Before the pandemic and the Federal Reserve's interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that's no longer the case. We still make daily calls. And are usually right. But our record for accuracy won't achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to rise. However, be aware that "intraday swings" (when rates change speed or direction during the day) are a common feature right now.
Here are some things you need to know:
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Regular readers will know that mortgage rates are largely determined by a type of bond called a mortgage-backed security (MBS). And that those rates often shadow the yield for 10-year Treasury notes.
The reason both those rates and those yields have been falling recently is that investors have suddenly grown enamored of all types of bonds. The extra demand has pushed up prices. But bond yields (and so mortgage rates) always move inversely to prices.
The reason I'm yet to change my rate lock recommendations (above) is that I'm still not convinced investors will keep buying bonds in the volumes they've been doing so far this year. They seem to be doing so because they've persuaded themselves that the Federal Reserve will stop hiking rates sooner than expected.
Yesterday, I quoted The Wall Street Journal's doubts about how realistic that expectation is. And, also yesterday, CNN Business's Before the Bell e-newsletter raised other doubts. Its headline read, "Bonds are back, but for how long?"
The article went on: "Now investors are betting that those rate increases are mostly over and that inflationary pressures are on a downswing. … The problem is that there's no guarantee that interest rates will actually come down, and investors could find themselves blindsided if they don't."
If investors do find themselves blindsided, that could be very bad news indeed for mortgage rates.
And there's plenty of concern among some pretty distinguished people. Last Friday, on Bloomberg TV, former Treasury Secretary Larry Summers predicted "tumult" for bonds through this year.
Of course, nobody knows for sure what will happen in the future to bonds or mortgage rates. But I see too much scope for trouble to urge anything other than caution.
According to Freddie Mac's archives, the weekly all-time low for mortgage rates was set on Jan. 7, 2021, when it stood at 2.65% for conventional, 30-year, fixed-rate mortgages.
Freddie's Jan. 5 report put that same weekly average at 6.48%, up from the previous week's 6.42%.
In November, Freddie stopped including discount points in its forecasts. It has also moved later in the day the time at which it publishes its Thursday reports. And, from now on, we'll be updating this section on Fridays.
Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the current quarter (Q4/22) and the first three quarters of next year (Q1/23, Q2/23 and Q3/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie's and the MBA's forecasts appeared on Dec. 19 and Freddie's on Oct. 21. Freddie now publishes its forecasts quarterly and its figures can quickly become stale.
Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. And their past record for accuracy hasn't been wildly impressive.
You should comparison shop widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:
"Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan."
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.