Mortgage and refinance rates today, Jan. 31, 2023

Today’s mortgage and refinance rates

Average mortgage rates just inched higher yesterday. Over January (excluding today), they’re a bit higher than they were mid-month but appreciably lower than they were at the start of it.

Earlier this morning, markets were signaling that mortgage rates today might fall, perhaps modestly. But that could change later in the day.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

I think it is slightly more likely that mortgage rates will fall than rise over the coming weeks. But a lot depends on the Federal Reserve playing ball tomorrow when it unveils its latest rate hike. Read on for more on this.

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:

• 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 fell to 3.51% from 3.55%. (Good 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 decreased to $77.52 from $78.40 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices moved lower to $1,921 from $1,942 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.
• CNN Business Fear & Greed index — held steady at 69 out of 100. (Neutral 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 fall. 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?

It’s still all about the Federal Reserve. And that’s likely to remain the case at least until 2 p.m. (ET) tomorrow when the central bank announces its latest interest rate hike.

However, if that rise is bigger than markets are expecting, its effects could hang around for weeks or months, perhaps driving mortgage rates significantly higher.

Markets are expecting a small rise by recent standards: 0.25% or 25 basis points. And, luckily, we have every reason to believe that will be what’s announced.

But counting ovoid chickens is a mug’s game — or, perhaps, an eggcup’s. So, you should be ready to lock your rate very quickly if the Fed shocks everyone with a higher-than-anticipated rate increase tomorrow afternoon.

Other threats to low mortgage rates

Today’s movements in markets and mortgage rates will probably be mostly about investors jockeying for position ahead of tomorrow’s Fed announcement.

However, the International Monetary Fund (IMF) published a report overnight that might or might not help mortgage rates. While its projections for inflation show price increases slowing this year and next (good for mortgage rates), those for economic growth are more optimistic than previously (bad for mortgage rates). Those broad-brush forecasts apply both globally and domestically although the details for each are different.

We’ll have to wait to see how markets react to the IMF report. Maybe they’ll just shrug it off.

After tomorrow, the next big threat to low mortgage rates arrives on Friday morning in the shape of the official jobs report for January. I’ll be covering that in more detail on Thursday and Friday.

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. 26 report put that same weekly average at 6.13%, down from the previous week’s 6.15%.

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.