Mortgage and refinance rates today, Jan. 5, 2023

Today’s mortgage and refinance rates

Average mortgage rates edged modestly lower yesterday. That was a pleasant surprise for me because I’d thought they might rise.

So far this morning, it’s looking as if mortgage rates today might rise on good employment news. As always, that could change as the hours pass.

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 6.644% 6.678% -0.03%
Conventional 15 year fixed 5.823% 5.88% -0.01%
Conventional 20 year fixed 6.357% 6.411% -0.13%
Conventional 10 year fixed 6.123% 6.241% -0.11%
30 year fixed FHA 6.338% 7.086% -0.14%
15 year fixed FHA 6% 6.5% +0.01%
30 year fixed VA 6.063% 6.294% -0.01%
15 year fixed VA 6.25% 6.61% -0.38%
Conventional 5 year ARM 6.691% 6.822% Unchanged
5/1 ARM FHA 6.691% 7.081% Unchanged
5/1 ARM VA 6.691% 7.081% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

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.

Tomorrow’s monthly jobs report is another danger point for mortgage rates. Of course, it could push them higher or lower.

But, as I’m a cautious person, my personal rate lock recommendations for now 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 climbed to 3.77% from 3.68%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
  • Major stock indexes were falling sharply soon after opening. (Sometimes good 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 tumbled to $72.74 from $74.39 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
  • Gold prices climbed to $1,841 from $1,865 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 — inched up to 41 from 40 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 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?

Yesterday’s minutes of the Federal Reserve’s rate-setting committee said pretty much what I thought they’d say. According to The Wall Street Journal (paywall), they “offered uncharacteristically blunt words of warning to investors that cautioned against underestimating the central bank’s determination to hold interest rates at higher levels to bring down inflation.”

Earlier in the day, Minneapolis Fed President Neel Kashkari reinforced the message. In an essay published Wednesday morning, he wrote that he expected that the Fed would have to raise rates by at least 1 percentage point over the next few months.

So, how did investors react to these dire warnings from the Fed? By shrugging them off. Were they listening, mortgage rates should have risen yesterday. But they fell, though only modestly.

This is good news in the short term. The longer mortgage rates remain low, the greater your opportunity to lock yours before they rise.

However, it’s worrying for the longer term. It’s one thing for markets to stick their fingers in their ears while the Fed’s issuing warnings. But they can’t carry on pretending when the central bank actually implements more rate hikes. And there could be real pain when delusion collides with reality.

Meanwhile, a top official from the International Monetary Fund (IMF) piled on the pressure overnight in an interview with The Financial Times. Reuters reports Gita Gopinath saying that inflation in the U.S. has not “turned the corner yet.”

Reuters continued: “She said it was important for the Fed to ‘maintain restrictive monetary policy’ until a ‘very definite, durable decline in inflation’ was evident in wages and industries not related to food or energy.”

Tomorrow’s jobs report

We should get sight of December’s employment situation report tomorrow at 8:30 a.m. (ET). Analysts and economists polled by MarketWatch expect the numbers to come in as follows:

  • New jobs created (“nonfarm payrolls”) — 200,000, down from 263,000 in November
  • Unemployment rate — 3.7%, unchanged
  • Average hourly earnings — Up 0.4%, less than the 0.6% increase a month earlier

Those forecasts are important because investors usually trade ahead of reports based on such analysts’ consensus expectations. And mortgage rates might not move far if the numbers come in as anticipated.

If there are even fewer new jobs and a bigger drop in the growth in average hourly earnings, mortgage rates might fall tomorrow. Markets will likely interpret that as the Fed’s 2022 rate hikes starting to achieve their intended consequence of slowing the economy. And they might hope that the Fed will U-turn on its current aggressive path.

However, if analysts’ forecasts are confounded by significantly stronger-than-expected employment data, mortgage rates might rise, perhaps appreciably.

Obviously, I have no idea what the numbers will be. But employment has proved remarkably resilient throughout 2022. And Tuesday’s job openings and labor turnover survey (JOLTS) for November gave little sign of any weakening in the jobs market.

And this morning’s ADP employment report also revealed surprising strength in that market. Chances are, mortgage rates are rising today as a result of that news and what it might mean for tomorrow’s figures.

So, I’m pessimistic about tomorrow. But I felt that way about yesterday, and look how that turned out.

For more background, including my hopes and fears for mortgage rates in 2023, please read the latest weekend edition of this report.

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 Dec. 29 report put that same weekly average at 6.42%, up from the previous week’s 6.27%.

In November, Freddie stopped including discount points in its forecasts. It has also moved 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 Dec. 19 and Freddie’s on Oct. 21. Freddie now publishes its forecasts quarterly and its figures can quickly become stale.

Forecaster Q4/22 Q1/23 Q2/23 Q3/23
Fannie Mae 6.7% 6.5%  6.4% 6.2%
Freddie Mac 6.8% 6.6%  6.5% 6.4%
MBA 6.6% 6.2%  5.6% 5.4%

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.

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