Mortgage and refinance rates today, Jan. 24, 2023

Today's mortgage and refinance rates

Average mortgage rates edged a little higher yesterday. There's been a run of rises since, appropriately, Friday the 13th and they're undeniably higher than they were that morning. But they're drifting rather than responding to anything obvious.

So far this morning, it's looking as if mortgage rates today might be unchanged or barely changed. But that might not last all day.

Find your lowest rate. Start here (Jan 25th, 2023)

Current mortgage and refinance rates

Should you lock a mortgage rate today?

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.

Here are my personal rate lock recommendations, which I updated on Saturday:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

Why are the first two recommendations still to lock? Because there's too much risk of volatility to take chances so near to closing. Of course, if you're happy with that risk, float away.

Market data affecting today's mortgage rates

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:

• The yield on 10-year Treasury notes edged higher to 3.55% from 3.51%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
• Major stock indexes were mostly lower soon after opening. (Sometimes good for mortgage rates.) When investors buy shares, they're often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
• Oil prices decreased to $81.73 from $82.04 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices edged up to $1,931 from $1,917 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold rises and worse when gold falls. Gold tends to rise when investors worry about the economy.
• CNN Business Fear & Greed index — nudged up to 65 from 63 out of 100. (Bad for mortgage rates.) "Greedy" investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while "fearful" investors do the opposite. So lower readings are often better than higher ones

*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.

Caveats about markets and 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 hold steady or close to steady. However, be aware that "intraday swings" (when rates change speed or direction during the day) are a common feature right now.

Find your lowest rate. Start here (Jan 25th, 2023)

Important notes on today's mortgage rates

Here are some things you need to know:

1. Typically, mortgage rates go up when the economy's doing well and down when it's in trouble. But there are exceptions. Read 'How mortgage rates are determined and why you should care'
2. Only "top-tier" borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you'll see advertised
3. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
5. Refinance rates are typically close to those for purchases.

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.

Are mortgage and refinance rates rising or falling?

The next decisive movement in mortgage rates might occur on Thursday or Friday when new reports about gross domestic product and inflation are due.

Or markets might shrug those off. In that case, it could be the next Federal Reserve rate hike on Feb. 1 that sends those rates higher or lower.

Either way, we seem for now (and barring unexpected events) to be in a period of drifting mortgage rates. So let's take the opportunity to examine a very significant potential danger a few months hence.

Debt ceiling

You've probably seen reports in the media about a looming debt ceiling crisis. The United States is unusual in facing those because they involve Congress raising the nation's borrowing limit to pay for expenditures already approved by … er, Congress.

Most legislatures around the world know that authorizing more spending usually means authorizing more debt. And they simply don't vote for measures if they don't want to pay for them.

Anyway, the debt ceiling is a thing in America. And it has the potential to do untold damage to the economy. That damage is partly untold because the debt ceiling has always been raised before the country runs out of money. So we literally don't know what will happen if it's not increased.

But economists are pretty much unanimous in predicting dire consequences. That's partly because the U.S. Treasury will almost certainly default on its debt payments. Those mostly take the form of Treasury bills, notes and bonds. They're currently seen as the safest investment in the world but they probably won't be in the event of an intentional default.

Many expect a meltdown in the global economy in the event of such a default. That's because Treasury securities are often used as collateral for debts within America and around the world. And the devalued collateral might easily see many such loans called in early, triggering mayhem.

Timing

The Treasury says it reached the debt ceiling last week. But it thinks it can keep going using emergency measures until mid-June. That's the likely trigger point unless Congress raises the ceiling.

There are two problems. First, a crucial group in the House of Representatives has vowed not to raise the ceiling unless some big cuts to several government programs are first made. And, secondly, markets will begin to respond to threats to the ceiling way before mid-June.

The last time there was a similar threat to the debt ceiling was in 2011. And that brought a:

1. Reduction in America's top-tier credit rating
2. Dramatic fall of 10.8% in the S&P stock index over just 10 trading days
3. Fall in the perceived value of Treasury bonds — Suddenly and unprecedentedly, they were rated lower than those offered by competitor countries such as Canada, France, Germany and the UK

All that happened in advance of the debt ceiling being hit. And the closer to a crisis Congress lets this get, the more jittery markets and financial institutions are likely to grow. Some are already adjusting their strategies in anticipation of a meltdown but the real effects will be felt in the coming months.

What this means for mortgage rates

A week or so ago, I mentioned the debt ceiling and said failing to raise it could ultimately lead to lower mortgage rates. And it may well. Because it will likely cause a recession or depression and mortgage rates typically fall at such times.

But, between now and then, mortgage rates will probably skyrocket for a while. That's because mortgage bonds will likely be infected by a new lack of confidence in Treasury bonds.

Investors will want a higher return to allow for the new additional risk across all bonds. And that means higher mortgage rates for those loans yet to have their rates fixed.

Of course, this won't bother you if you already have a fixed-rate mortgage in place — unless you need to move or refinance. Nothing can touch your rate as long as you stay put.

But it's worrying for those hoping to move or buy their first home in the summer. If that's you, you might wish to consider bringing forward your plans. You might also decide to explore your options if you have an adjustable-rate mortgage.

Naturally, this potential crisis may simply evaporate if the House backs off. But, right now, things aren't looking good.

For more background on mortgage rates, please read the latest weekend edition of this daily rates report.

Recent trends

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. 19 report put that same weekly average at 6.15%, down from the previous week's 6.33%.

In November, Freddie stopped including discount points in its forecasts. It has also delayed until 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.

Expert mortgage rate forecasts

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 Jan. 20. Freddie's was published 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.

Find your lowest rate today

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."

Time to make a move? Let us find the right mortgage for you (Jan 25th, 2023)

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.