Mortgage and refinance rates, July 20

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Today’s Mortgage and Refinance Rates

Average mortgage rates fell slightly yesterday, reversing a similar rise on Monday. It’s good to take a break from the volatility that has plagued the markets recently. But it is too early to hope that the market turbulence will be put aside in the longer term.

Looking first at key market moves, current mortgage rates could remain stable or close to stable. But that could change as the day goes on.

Current mortgage and refinance rates

Program Mortgage rate APR* To change
30-year fixed conventional 5.932% 5.967% +0.02%
15-year fixed conventional 5.134% 5.194% +0.11%
20-year fixed conventional 5.711% 5.769% -0.07%
10-year fixed conventional 5.335% 5.435% +0.1%
30-year fixed FHA 5.914% 6.656% -0.02%
15-year fixed FHA 5.334% 5.835% +0.09%
30-year fixed PV 5.38% 5.602% +0.07%
15-year fixed VA 5.177% 5.547% -0.02%
Pricing is provided by our partner network and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.

Should you lock in a mortgage rate today?

Don’t lock in a day when mortgage rates look set to drop. My recommendations (below) are intended to provide longer-term suggestions on the general direction of these rates. Thus, they do not change daily to reflect fleeting sentiments in volatile markets.

The strong upward trend seen earlier in the year has dissipated for now. But that hasn’t reversed, at least not yet. And we still see a slight upward trend underlying mortgage rate movements.

So, for now, my personal longer-term rate lock recommendations should remain:

  • TO BLOCK if closing seven days
  • TO BLOCK if closing 15 days
  • TO BLOCK if closing 30 days
  • TO BLOCK if closing 45 days
  • TO BLOCK if closing 60 days

>Related: 7 tips for getting the best refinance rate

Market Data Affecting Today’s Mortgage Rates

Here is an overview of the situation this morning around 9:50 a.m. (ET). The data, compared to around the same time yesterday, was:

  • The yield on 10-year treasury bills stable at 2.98%. (Neutral for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular treasury yields
  • Main stock indices were mixed shortly after opening. (Neutral for mortgage rates.) When investors buy stocks, they often sell bonds, which lowers bond prices and raises yields and mortgage rates. The opposite can happen when the indices are weaker. But it’s an imperfect relationship
  • Oil prices climbed to $102.22 from $101.80 a barrel. (Bad for mortgage rates*.) Energy prices play a major role in creating inflation and also indicate future economic activity
  • Gold prices fell slightly to $1,709 from $1,712 an ounce. (Neutral for mortgage rates*.) It’s generally better for rates when gold goes up and worse when gold goes down. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates down
  • CNN Business Fear & Greed Index – pushed up to 39 from 35 out of 100. (Bad for mortgage rates.) “greedy” investors cause bond prices to fall (and interest rates to rise) when they leave the bond market and turn to equities, while “fearful” investors do the opposite. So lower readings are better than higher ones

* A movement of less than $20 in gold prices or 40 cents in oil prices is a change of 1% or less. We therefore only consider significant differences as good or bad for mortgage rates.

Market and rate warnings

Prior to 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 of what would happen to mortgage rates that day. But this is no longer the case. We are still making daily calls. And are usually right. But our accuracy record won’t reach its former high levels until things stabilize.

So use the markets only as an indication. Because they have to be exceptionally strong or weak to be relied upon. But, with this caveat, mortgage rates now appear unchanged or barely changed. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Important Notes About Today’s Mortgage Rates

Here are some things you should know:

  1. Typically, mortgage rates rise when the economy is doing well and fall when it is struggling. But there are exceptions. Lily ‘How mortgage rates are determined and why you should care
  2. Only “top tier” borrowers (with great credit scores, large down payments, and very sound finances) get the ultra-low mortgage rates you’ll see advertised
  3. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements – although they all generally follow the larger trend over time
  4. When daily rate changes are small, some lenders will adjust closing costs and leave their rates unchanged
  5. Refinance rates are generally close to purchase rates.

There’s a lot going on right now. And no one can claim to know for sure what will happen to mortgage rates in the hours, days, weeks or months to come.

Are mortgage and refinance rates going up or down?

Has inflation already started to bite as hard as it should? Overnight, the Financial Times (paywall) suggested: “US consumers are flexing but not breaking as prices soar. Can it last?

The gist of the FT’s argument is that inflation remains a concern and an inconvenience for most Americans. But many do not yet feel real pain. They divert part of the income they usually save to protect themselves from higher prices. Indeed, the personal savings rate is down 6% this year.

However, this mostly applies to those with middle-class incomes and lifestyles. Those with lower salaries are already feeling the pinch. You can see it in rising delinquency rates for car loans among subprime borrowers, according to the FT.

This concretely illustrates my analysis yesterday. Bond markets cannot decide whether they are more afraid of inflation or a possible recession.

Inflation tends to drive up mortgage rates. And the fear of a possible recession tends to pull them down.

Until these markets decide which of these markets scares them the most, mortgage rates will not settle into a strong and consistent trend. And I shouldn’t be a bit surprised if we see the return of volatility soon.

Read the weekend edition of this daily article for more information.

Recent trends

For much of 2020, the general trend in mortgage rates was clearly downward. And a new weekly all-time low was set 16 times that year, according to Freddie Mac.

The most recent weekly record low occurred on January 7, 2021, when it stood at 2.65% for 30-year fixed rate mortgages.

Rates then plummeted, moving little for the next eight or nine months. But they started to increase noticeably in September. Unfortunately, they have mostly increased since the start of 2022, although May and June were milder months.

Freddie’s July 14th report places that same weekly average for 30-year fixed-rate mortgages at 5.51% (with 0.8 fees and points), at the top compared to 5.3% the previous week.

Note that Freddie expects you to buy discount points (“with 0.8 fee and points”) at close which earn you a lower rate. If you don’t, your rate will be closer to what we and others quote.

Expert Mortgage Rate Forecasts

Longer term, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each have a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates. .

And here is their current rate forecast for the last three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).

The figures in the table below are for 30-year fixed rate mortgages. Those of Fannie were published on June 16 and those of the MBA on June 10. Freddie’s were released on April 18.

Forecaster Q2/22 Q3/22 Q4/22 Q1/23
Fannie Mae 5.1% 5.0% 5.0% 5.0%
Freddie Mac 4.8% 4.8% 5.0% 5.0%
MBA 5.1% 5.1% 5.0% 5.0%

Of course, given so many unknowables, the current crop of predictions could be even more speculative than usual. Recent events certainly make them look like that.

Find your lowest rate today

You should do a lot of comparison shopping no matter what type of mortgage you want. As a federal regulator, the Consumer Financial Protection Bureau states:

“Shopping around for your mortgage can save you real money. It may not seem like much, but saving even a quarter point of interest on your mortgage saves you thousands of dollars over the term of your loan.

Mortgage Rate Methodology

Mortgage reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and APR for each loan type to display in our chart. As we calculate the average of a range of prices, it gives you a better idea of ​​what you might find in the market. In addition, we calculate the average of the rates for the same types of loan. For example, fixed FHA with fixed FHA. The end result is a good overview of daily rates and how they change over time.

The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute advertising for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent company or affiliates.

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