Mortgage and refinance rates, April 21
Today’s Mortgage and Refinance Rates
Average mortgage rates fell yesterday. But the move was smaller than Monday’s or Tuesday’s gains. And that may be a welcome break for those rates rather than a meaningful change.
Today Mortgage Rates May Rise. A larger first hour increase this morning quickly moderated. But that suggests considerable volatility, which means anything can happen later.
Current mortgage and refinance rates
|30-year fixed conventional||5.391%||5.417%||+0.05%|
|15-year fixed conventional||4.539%||4.576%||-0.01%|
|20-year fixed conventional||5.326%||5.37%||-0.1%|
|10-year fixed conventional||4.467%||4.544%||+0.05%|
|30-year fixed FHA||5.236%||6.025%||-0.13%|
|15-year fixed FHA||4.516%||4.819%||-0.16%|
|30-year fixed PV||5.156%||5.372%||-0.04%|
|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 on 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.
You can never tell if a sudden change in direction of mortgage rates is the start of something new or just a blip. But chances are yesterday’s drop is in the blip category. We’ve seen four more (mostly larger) declines so far this month, two of them on consecutive days. And they were soon overwhelmed by bigger increases.
So my personal longer term rate lock recommendations remain:
- LOCK if closing 7 days
- LOCK if closing 15 days
- LOCK if closing 30 days
- LOCK if closing 45 days
- LOCK 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 2.89%. (Neutral for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular treasury yields
- Main stock indices were higher shortly after opening. (Bad 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 pushed to $103.99 from $103.48 a barrel. (Bad for mortgage rates*.) Energy prices play a big role in creating inflation and also indicate future economic activity
- gold price slightly lower at $1,948 vs. $1,949 an ounce. (Neutral for mortgage rates*.) In general, it’s 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 – jumped to 48 from 42 out of 100. (Bad for mortgage rates.) “greedy” investors push bond prices down (and interest rates up) when they exit 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, today’s mortgage rates could go up. 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:
- 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‘
- Only “top tier” borrowers (with great credit scores, large down payments, and very healthy finances) get the ultra-low mortgage rates you’ll see advertised
- 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
- When daily rate changes are small, some lenders will adjust closing costs and leave their rates unchanged
- 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?
On Monday, economist Paul Krugman wrote an e-newsletter for The New York Times. In it he explained what was happening with mortgage rates. I’m going to repeat a few of his paragraphs just so you can hear what I said in a different voice and from a slightly different point of view:
|Although the Fed does not directly set mortgage rates, banks deciding how much to charge for loans pay close attention to what they think the Fed will do in the future. If they expect short-term rates to rise, they will start charging more for home loans right away, because they don’t want to tie up their money since they can get more later.|
|Sure enough, while everyone expects the Fed to continue raising short-term interest rates multiple times over the next year, mortgage rates – and long-term rates for commercial borrowers – have already climbed more or less to pre-pandemic levels, even though the Fed has just started to increase|
Dr Krugman was basing his numbers on Freddie Mac’s weekly survey (see latest, released today, below), and that’s why he thinks mortgage rates are roughly at pre-Central levels. pandemic. Those who follow the daily rates know that they are already higher than those – and (except yesterday) still rising.
More rate hikes to come?
Regular readers will be aware of a second looming threat to mortgage rates. On May 4, the Federal Reserve is due to unveil its plans to reduce its holdings of mortgage bonds.
These rates could move in both directions following this announcement. If the Fed’s plans are softer than markets fear, mortgage rates could fall. But if they are more aggressive, they could increase further.
We won’t know for sure until that day. But, judging by recent rhetoric from senior Fed officials, I guess more aggressiveness and higher rates are more likely.
Read the weekend edition of this daily article for more information.
Recent Trends — Updated Today
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.
Since then, the chart has been mixed with long stretches of ups and downs. Unfortunately, the increases have accelerated since last September.
Freddie’s April 21th report places that same weekly average for 30-year fixed rate mortgages at 5.11% (with 0.8 fees and points), at the top compared to 5% 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 April 19, those of Freddie on April 18 and those of the MBA on April 13.
Of course, given so many unknowables, the current crop of predictions could be even more speculative than usual. I’m afraid I’m less optimistic than any of them.
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 said:
“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. Because we average a range of prices, it gives you a better idea of what you might find in the market. In addition, we average rates for the same types of loans. 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.