Mortgage and refinance rates today, Jan. 26, 2023

Today’s mortgage and refinance rates

Average mortgage rates edged lower yesterday. But, like the increases we’ve seen this week, it’s unlikely to have changed your mortgage offer much.

Once again, markets were this morning signaling that mortgage rates today might barely move. However, that could change later in the day.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

I’m still optimistic about mortgage rates over the coming weeks. But that optimism’s based on a Federal Reserve rate hike and a number of economic reports all delivering market-friendly news.

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.

Here are my personal rate lock recommendations, which I updated on Saturday:

• 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

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

Why are the first two recommendations still to lock? Because there’s too much risk of volatility to take chances so near to closing. Of course, if you’re happy with that risk, float away.

>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 3.49% from 3.45%. (Bad for mortgage rates.) 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 bad 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 increased to $81.91 from $80.19 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices inched higher to $1,937 from $1,932 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 — climbed to 69 from 59 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?

Yesterday, I listed the near-term events most likely to move mortgage rates in a sustained way. And today brings the first — but probably the least important — of those.

This morning saw the release of the first reading (two refinements to come) of gross domestic product (GDP) growth during the last quarter of 2022. Before publication, bond investors were hoping that this would show the economy growing more slowly during that period than previously.

How come? Well, the Federal Reserve has been hiking interest rates in order to slow the economy. Because lower or negative GDP growth should rein in inflation.

Investors hope the sooner that happens, the sooner the Fed can pause those rate increases and then begin cutting again. And they’re desperate to get back to a “cheap money” (low-rate) environment as soon as possible.

In the event, this morning’s GDP figure showed growth of 2.9%. In the previous (third-quarter) period of last year, that figure was 3.2%. And, before publication, economists polled by MarketWatch had forecast growth of 2.8% last quarter.

So, growth slowed but not quite as much as economists had expected. Initially, mortgage rates rose modestly on the news but they were close to unchanged by 9:50 a.m. (ET). Perhaps investors have decided to shrug off this one.

I said earlier that this was the first of three crucial imminent events for mortgage rates. The other two are an inflation report tomorrow and a Fed rate hike next Wednesday, Feb. 1. Think of these three as a crescendo with the last by far the most important.

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

Recent trends

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

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 and the MBA’s forecasts appeared on Jan. 20. 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.