Mortgage and refinance rates today, Oct. 8, 2021

Today’s mortgage and refinance rates 

Average mortgage rates edged higher yesterday. That means we haven’t seen a fall since Monday. Still, these rates remain extraordinarily low by historical standards.

This morning’s employment report disappointed many. And markets seem unsure which way to jump. But early signs suggest mortgage rates today may move higher. However, that could change as investors digest the jobs data.

Find and lock a low rate (Oct 15th, 2021)

Current mortgage and refinance rates 

Find and lock a low rate (Oct 15th, 2021)

---

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?

With the debt ceiling out the way until early December, investors will be focusing on this morning’s job numbers, which were mediocre. Will that be enough to delay further rises in mortgage rates? Maybe. But I doubt it.

Indeed, the range of likely influences on those rates that are trying to push them higher seems to me to be much stronger than the forces trying to drag them lower.

So my personal rate lock recommendations 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

However, I don’t claim perfect foresight. And your personal analysis could turn out to be as good as mine — or better. So you might choose to be guided by your instincts and your personal tolerance for risk.

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 time yesterday, were:

• The yield on 10-year Treasury notes rose to 1.60% from 1.56%. (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 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
• Oil prices climbed to $79.62 from $76.61 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity. 
• Gold prices nudged up to $1,776 from $1,757 an ounce. (Neutral for mortgage rates*.) In general, it is 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 — inched higher to 36 from 35 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 change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. 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 rise. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find and lock a low rate (Oct 15th, 2021)

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 wider 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. And a recent regulatory change has narrowed a gap that previously existed

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today and soon

This morning’s employment situation report is arguably the most important of all economic reports in the current environment. So I’d likely be writing about it no matter what. 

But what matters today is that the Federal Reserve has signaled that this morning’s report would be crucial to its decision over when to wind down (“taper”) its “quantitative easing” (cheap money) program.

And that program has probably been the single most important driver of low mortgage rates over the last 18 months. Because the Fed’s been buying mortgage-backed securities (a type of bond, the yields on which largely determine mortgage rates) at a rate of $40 billion a month.

And it’s close to certain that, as the Fed slowly turns off that faucet over the coming months, mortgage rates will rise.

Were this morning’s mediocre jobs figures enough to postpone the tapering announcement, which most have been expecting to come after the Fed’s next policy meeting on Nov. 3? Nobody can be sure.

And, while I personally doubt it, it will be investors’ takes on that question that will ultimately decide what happens next to mortgage rates. If enough agree with me, those rates may continue higher. But if enough believe the Fed will delay its tapering announcement, that would relieve some of the upward pressure.

Sustained rises now?

In any event, other forces seem set to push rates higher. From continuing falls in COVID-19 infection rates to data that overall suggest that the economic recovery is largely on track, the days of uberlow mortgage rates look numbered.

That’s not to say that those rates will rise in a straight line. There will inevitably be days and longer periods of falls. But I suspect that the overall, sustained trend will be upward.

Of course, nothing’s inevitable. And it’s never impossible that some huge event will unexpectedly appear that disrupts everything. So you can never rule out lower rates. But, to me, those look way less likely than higher ones.