Mortgage and refinance rates today, July 6, 2022

Today’s mortgage and refinance rates

Average mortgage rates barely moved yesterday, breaking a three-business-day run of falls. That was a bit of a surprise because another drop had looked likely first thing yesterday morning. But not much of one because we’re still struggling with market volatility.

There’s still little momentum in markets this morning. And mortgage rates today look likely to hold steady. But, of course, that could change as the day progresses.

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.

No, yesterday’s holding steady of mortgage rates was no more significant than the previous few days of falls or earlier rises. Most of all those is likely down to market volatility rather than any change in the fundamentals.

I still think higher overall rates are more likely than lower ones over the next few weeks. So, my personal rate lock recommendations for the longer term must 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 a.m. (ET). The data, compared with roughly the same yesterday, were:

• The yield on 10-year Treasury notes inched up to 2.83 from 2.82%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mixed and barely moving soon after opening. (Neutral 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 may happen when indexes are lower. But this is an imperfect relationship
• Oil prices fell to $98.37 from $103.10 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices fell to $1,763 from $1,791 an ounce. (Bad 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. And worried investors tend to push rates lower
• CNN Business Fear & Greed index — rose to 26 from 19 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 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. However, be aware that “intraday swings” (when rates change 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?

“Recession Obsession” was the headline in one economic newsletter yesterday. And the financial media as well as markets seem to be talking about little else.

That explains why mortgage rates have been falling recently rather than rising, as they were a few weeks ago. Fear of a future recession tends to pull mortgage rates down while inflation tends to push them up.

But only markets’ focus has changed. Inflation remains an enormous threat. And sooner or later, I’m expecting that focus to switch back.

However, as I explained yesterday, there are some early signs that suggest inflation may become a more limited issue even without the economic pain the Federal Reserve is planning to inflict. I pointed to falling commodity prices and China’s slowdown as possible indicators that price rises might be leveling off.

But the words “possible” and “might” are doing some heavy lifting there. And it’s too soon to assume inflation is yet easing up.

Still, it does mean I’m less confident than I have been that mortgage rates will inevitably push higher. There’s now hope they won’t. But it’s not the sort of hope you can yet bank on.

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

Recent trends

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions that year, according to Freddie Mac.

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

Rates then bumbled along, moving little for the following eight or nine months. But they began rising noticeably that September. Unfortunately, they’ve been mostly shooting up since the start of 2022, although May was a kinder month.

Freddie’s June 30 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.70% (with 0.9 fees and points), down from the previous week’s 5.81%.

Note that Freddie expects you to buy discount points (“with 0.9 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would be closer to the ones we and others quote.

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 current rate forecasts for the remaining three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Jun. 16, and the MBA’s on Jun. 10. Freddie’s were released on Apr. 18. But it now updates its figures only quarterly, so they’re already looking stale.

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. Recent events certainly make them look that way.

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.”

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.