Mortgage And Refinance Rates, Jan. 9

Today’s mortgage and refinance rates

Average mortgage rates fell significantly last Friday. That was fantastic news because it brought those rates for a conventional, 30-year, fixed-rate mortgage closer to 6% than 6.5%. They peaked at 7.24% in mid-October, according to the Mortgage News Daily archive.

Markets this morning were signaling that mortgage rates today might barely move. However, that could change as the hours pass.

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 6,382% 6,414% Unchanged
Conventional 15 year fixed 5,479% 5,536% -0.1%
Conventional 20 year fixed 6.09% 6,145% -0.03%
Conventional 10 year fixed 5,724% 5,848% -0.02%
30 year fixed FHA 6,091% 6,832% -0.01%
15 year fixed FHA 5,663% 6,155% -0.11%
30 year fixed VA 6.06% 6,293% Unchanged
15 year fixed VA 6,242% 6,602% Unchanged
Conventional 5 year ARM 6,537% 6,802% +0.03%
5/1 ARM FHA 6,537% 7,059% +0.03%
5/1 ARM VA 6,537% 7,059% +0.03%
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.

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.

Even after Friday’s dramatic tumble in mortgage rates, I still haven’t changed my rate lock recommendations. How come? Well, in the short term, such dramatic falls are often followed by a bounce after markets sleep on their fevered trading. But there’s another reason, which I cover below.

So, my personal rate lock recommendations for now remain:

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

>Related: 7 Tips to get the best refinance rate

Market data affecting today’s mortgage rates

Here’s a snapshot of the state of play this morning at about 9:50 am (ET). The data, compared with roughly the same time last Friday, were:

  • The yield on 10-year Treasury notes fell to 3.58% from 3.71%. (Good for mortgage rates.) However, they were rising this morning. More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
  • Major stock indexes were higher soon after opening. (Sometimes asked 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 climbed to $75.89 from $74.52 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
  • Gold prices increased to $1,882 from $1,849 an ounce. (Good 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 — shot up to 53 from 44 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 be unchanged or barely changed. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.

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?

Mortgage rates have certainly been falling so far this year. But they were lower than last Friday’s closing level in mid-December. And they’re not that much lower than they were a month ago.

Yes, dramatic falls like last Friday’s are exciting. But it can be a mistake to endow them with too much significance.

Fat vs. markets

Markets aren’t in the mood for bad news right now. When they looked at last Friday’s employment situation report for December, they shrugged off the higher-than-expected number of new jobs and the fall in the unemployment rate.

And, instead, they focused exclusively on the increase in average hourly earnings, which was half that recorded in November and below forecasts. That focus wasn’t wholly unreasonable. In the past, the Federal Reserve has said that those earnings numbers are an important part of its decision-making process when it comes to interest rate hikes.

However, after a stumbling start, markets reacted on Friday as if the Fed had said it would stop its rate hikes. And that was irrational. On the contrary, in the minutes of the last meeting of its rate-setting committee, released last Tuesday, the Fed made clear that it was committed to continuing increasing rates for months to come.

I’m not alone in worrying that markets are jumping the gun with the assumptions they made about last Friday’s jobs report. The Wall Street Journal (paywall) greeted the report with the headline, “Strong Jobs Report Doesn’t Resolve Fed Debate on Next Rate Rise.” And the article underneath began: “Friday’s employment report does little to clarify how much the Federal Reserve will raise interest rates at its next policy meeting.”

There’s no guarantee that markets will have second thoughts about last Friday’s drop in mortgage rates. But it would be no surprise if they do.

This week

The next release of important economic data is due this Thursday (Jan. 12). The consumer price index (CPI) may currently be the most crucial of all economic reports.

Analysts are expecting prices to have held steady in December. But they forecast that “core” prices (which exclude volatile food and energy prices) will have risen a little higher in December than in November (0.3% compared with 0.2%), according to MarketWatch. If the actual numbers are higher than those forecast, mortgage rates might rise. If they’re lower, they might fall even further.

My apologies for there being no weekend edition last week. I spent Saturday in the hospital with an urgent (but not life-threatening) condition.

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. Spirit, 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 have 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.

Forecaster Q4/22 Q1/23 Q2/23 Q3/23
Fannie Mae 6.7% 6.5% 6.4% 6.2%
Freddie Mac 6.8% 6.6% 6.5% 6.4%
MBA 6.6% 6.2% 5.6% 5.4%

Of course, given so many unknowns, 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 type 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.

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