Mortgage and refinance rates today, Jan. 20, 2023

Today’s mortgage and refinance rates

Average mortgage rates moved moderately higher yesterday. But they remain very close to their four-month lows.

Earlier this morning, markets were signaling that mortgage rates today might move higher again. However, the momentum wasn’t strong so a change of direction later is quite possible.

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.

I didn’t get a clear steer yesterday from Federal Reserve speakers about future rate hikes. So, I can’t change some of my personal rate lock recommendations (below) today, as I’d hoped. Maybe I’ll have better news tomorrow.

But, for now, those 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

>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 time yesterday, were:

• The yield on 10-year Treasury notes rose to 3.46% from 3.40%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
• Major stock indexes were mixed soon after opening. (Neutral 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 decreased to $79.74 from $80.10 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices edged up to $1,923 from $1,919 an ounce. (Neutral 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 — fell to 52 from 55 out of 100. (Good 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 rise. 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?

The Fed

I was hoping that yesterday would bring a clearer understanding of how individual members of the Federal Reserve’s rate-setting committee were viewing the prospect of future interest rate hikes. However, that didn’t happen.

On Wednesday, two of those committee members suggested they thought the central bank could ease off its rate increases. But yesterday’s speakers were more divided.

Of the three, only Federal Reserve Vice Chair Lael Brainard struck an optimistic note. Fed Bank of Boston President Susan M. Collins and Fed Bank of New York President John Williams were both more cautious, sticking closer to the central bank’s recent line.

Philadelphia Fed President Patrick Harker and Fed Gov. Christopher Waller have speaking engagements later today, and perhaps they’ll provide enough information to make a better guess about what comes next for interest rates.

However, whatever they say, the most influential voice remains Fed Chair Jerome Powell. And there’s little evidence so far that he’s backed off his hawkish stance: a steely determination to conquer inflation through higher interest rates regardless of the economic costs.

Today, the Fed enters its self-imposed period of silence in the run-up to each meeting of its rate-setting committee. And we’ll hear no more until the next rate hike is announced on Feb. 1.

What this means for mortgage rates

Mortgage rates aren’t directly set by the Fed. But the central bank’s actions on other interest rates greatly influence them.

Right now, CME’s FedWatch tool puts the probability of a 0.25% (25-basis-point) hike on Feb. 1 at 94.3%. Investors are betting big on that outcome, which is why mortgage rates are currently close to their four-month lows.

But there remains a possibility of a 0.5% (50-basis-point) hike that day. And, if that happens, mortgage rates could rise significantly, especially if the Fed is hawkish in its report and news conference later that afternoon.

Obviously, I have no idea what will happen that day. But I suspect that the chances of a higher-than-expected hike are greater than markets are currently anticipating.

Still, I retain some of the sunny optimism that I felt yesterday. Things will probably turn out OK on Feb. 1. But I can’t help but worry that they might not.

For more background on mortgage rates, please read the latest weekend edition of this daily rates report.

Recent trends — updated today

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. 19 report put that same weekly average at 6.15%, down from the previous week’s 6.33%.

In November, Freddie stopped including discount points in its forecasts. It has also delayed until later in the day the time at which it publishes its Thursday reports. And, from now on, we'll be updating this section on Fridays.

Expert mortgage rate forecasts — updated today

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 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 forecast appeared on Jan. 20 and the MBA’s on Dec. 19. Freddie’s was published on Oct. 21. Freddie now publishes its forecasts quarterly and its figures can quickly become stale.

Of course, given so many unknowables, 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 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.