Mortgage and refinance rates today, September 10, 2020

Today’s mortgage and refinance rates 

Average mortgage rates held steady yesterday. So they remain within striking distance of the all-time low. Conventional loans today start at 2.75% (2.75% APR) for a 30-year, fixed-rate mortgage. 

Find and lock a low rate (Sep 16th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Sep 16th, 2020)

Earlier this week, we slimmed down this daily article to make it easier for you to read. But we transferred much of the detail to a new stand-alone article: How mortgage rates are determined and why you should care

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

I personally think there’s a good chance that the Federal Reserve’s large and continuing interventions in the mortgage market will keep mortgage rates low — and perhaps push them lower. But even the Fed can’t determine rates all the time. And some periods of rises are probably inevitable.

That’s why I suggest you lock within a couple of weeks of closing. You minimize your risk of having to lock during a bad patch while maximizing the time you get to benefit from the recent downward trend.

But there’s still some danger from unexpected events. And you must decide when to lock based on your personal tolerance for risk.

• 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

Market data affecting today’s mortgage rates 

Here’s the state of play this morning at about 9:50 a.m. (ET). The data, compared with about the same time yesterday morning, were:

• The yield on 10-year Treasurys climbed to 0.71% from 0.68%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
• Major stock indexes were higher. (Bad for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite happens when indexes are lower
• Oil prices rose to $37.92 from $37.33. (Neutral for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
• Gold prices increased to $1,970 an ounce from $1,951. (Neutral for mortgage rates*.) In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower.
•  CNN Business Fear & Greed index moved up to 63 from 59 out of a possible 100 points. (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 better than higher ones

*A change of less than $20 on gold prices or a matter of cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

Time was when those numbers gave a good indication of where mortgage rates would move during a day. But with the Fed now intervening invisibly in the mortgage market, that’s no longer the case.

So use markets only as a rough guide. They have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. Today they’re looking a little worse for mortgage rates as markets continue their resurgence, in spite of this morning’s disappointing weekly unemployment numbers.

Find and lock a low rate (Sep 16th, 2020)

Important notes on today’s mortgage rates

Here’s some stuff you need to know:

1. The Fed’s ongoing interventions in the mortgage market ($1 trillion and counting) should put continuing downward pressure on these rates. But it can’t work miracles all the time. So expect short-term rises as well as falls. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand that aspect of what’s happening
2. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions
3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
4. Lenders vary. Yours may or may not follow the crowd when it comes to rate movements — though they all usually follow the wider trend over time
5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
6. At times of high demand, lenders can push up rates as a way of managing their workflow. Neither markets nor the Fed can help when that happens

So there’s a lot going on here. And nobody can claim to know with certainty how mortgage rates will move in coming hours, days, weeks or months. But see what 10 experts think could happen between now and the end of this year:

Are mortgage and refinance rates rising or falling?

Over the last few months, the overall trend for mortgage rates has clearly been downward. A new all-time low was set early in August and another looked possible last week — before better-than-expected employment data snatched that possibility away. Still, a new one remains tantalizingly close.

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.

Expert mortgage rate forecasts

And here are their current rates forecasts for the last two quarters of 2020 (Q3/20 and Q4/20) and the first two of 2021 (Q1/21 and Q2/21).

Note that Fannie’s and the MBA’s are updated monthly while Freddie’s are published quarterly So Freddie’s sometimes feel stale. The numbers in the table below are for 30-year, fixed-rate mortgages:

So expectations vary considerably. You pays yer money …

Find your lowest rate today

It’s always been important to shop widely for your new mortgage or refinance. You stand to save thousands over just a few years by getting quotes from multiple lenders and comparing them carefully.

But you’ve rarely had more to gain by shopping around than you do now. The mortgage market is currently very messy. And some lenders are offering appreciably lower rates than others. Worse, some are making it harder to get any mortgage at all if you want a cash-out refinance, a loan for an investment property, a jumbo loan or if your credit score is damaged.

So shopping around could save you a bundle.

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.