Mortgage and refinancing rates today May 25 | Decreasing rate


Current mortgage and refinancing rates

Average mortgage rates edged down yesterday. This is always good news. But that seems to have more to do with a drift without direction than an improvement in outlook.

However, first thing, mortgage rates seemed likely to fall slightly again.

Find and lock a great rate (May 25, 2021)

Current mortgage and refinancing rates

Program Mortgage rate APR* Switch
Conventional 30 years fixed 2 993% 2 998% -0.07%
Conventional 15 years fixed 2.25% 2.367% Unchanged
Conventional 20 years fixed 2.75% 2,842% -0.03%
Conventional 10 years fixed 1,824% 2,022% -0.09%
30 years FHA fixed 2,769% 3,426% -0.04%
15-year fixed FHA 2.489% 3.09% -0.01%
ARM FHA 5 years 2.5% 3.188% Unchanged
Fixed VA 30 years 2.375% 2,547% -0.12%
15-year fixed VA 2.25% 2,571% Unchanged
5-year VA ARM 2.5% 2.366% Unchanged
Prices are provided by our network of partners and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our rate assumptions here.

Find and lock a great rate (May 25, 2021)


COVID-19 Mortgage Updates: Mortgage lenders change rates and rules due to COVID-19. To see the latest news on the impact of the coronavirus on your home loan, click here.

Should you lock in a mortgage rate today?

Mortgage rates continue to align. Recent falls have been helpful. But, on average, they’re still a bit higher now than they were at the start of the month.

There may be more falls to come. But, overall, I expect a slight upward drift in the weeks and months to come. And, ultimately, it can turn into a period of steeper increases.

My personal rate lock-in recommendations therefore remain:

  • LOCK in case of closure 7 days
  • LOCK in case of closure 15 days
  • LOCK in case of closure 30 days
  • LOCK in case of closure 45 days
  • LOCK in case of closure 60 days

However, I do not claim to have perfect foresight. And your personal analysis could turn out as good as mine – or better. You can therefore choose to be guided by your instincts and your personal risk tolerance.

Market data affecting current mortgage rates

Here’s a look at the state of play this morning around 9:50 a.m. (ET). The data, compared to around the same time yesterday, was:

  • the yield on 10-year treasury bills pushed down to 1.58% from 1.62%. (Good for mortgage rates.) More than any other market, mortgage rates generally tend to track these particular yields of Treasuries, although less recently.
  • Main stock market indices were higher at the opening. (Bad for mortgage rates.) When investors buy stocks, they often sell bonds, which lowers bond prices and increases yields and mortgage rates. The reverse can happen when the indices are lower
  • Oil price rose to $ 66.36 from $ 64.77 a barrel. (Bad for mortgage rates *.) Energy prices play an important role in creating inflation and also indicate future economic activity.
  • Gold price held steady at $ 1,882 per ounce. (Neutral for mortgage rates*.) In general, it’s better for rates when gold goes up, and worse when gold goes down. Gold tends to rise when investors worry about the economy. And worried investors tend to cut rates
  • CNN Business Fear & Greed Index – slightly increased to 37 from 35 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) when they exit the bond market and turn to stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

* A change of less than $ 20 in gold prices or 40 cents in oil prices is a fraction of 1%. We therefore only count significant differences as good or bad for mortgage rates.

Warnings about markets and prices

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the numbers above and make a pretty good guess at what would happen to mortgage rates that day. But this is no longer the case. We still make daily calls. And are generally right. But our accuracy record will not reach its former high levels until things are sorted out.

Therefore, only use the markets as a guide. Because they have to be exceptionally strong or weak to be able to count on them. But, with that caveat, so far today’s mortgage rates look likely to drop slightly. However, be aware that intraday fluctuations (when rates change direction during the day) are a common feature at this time.

Find and lock a great rate (May 25, 2021)

Important Notes About Current Mortgage Rates

Here are some things you should know:

  1. Typically, mortgage rates rise when the economy is doing well and fall when it is struggling. But there are exceptions. Lily ‘How mortgage rates are determined and why you should care
  2. Only senior borrowers (with exceptional credit scores, large down payments and very healthy finances) benefit from the ultra-low mortgage rates you’ll see advertised.
  3. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate moves – although they all generally follow the larger trend over time.
  4. When daily rate changes are small, some lenders adjust closing costs and leave their rate tables unchanged.
  5. Refinancing rates are generally close to those for purchases. But some types of refinancing are higher following a regulatory change

So there is a lot going on here. And no one can claim to know for sure what will happen to mortgage rates in the hours, days, weeks or months to come.

Are mortgage and refinancing rates going up or down?

Today And so on

Mortgage rates are actually determined by trading mortgage-backed securities in a market similar to that of other types of bonds. And few bond markets appear to have been affected much by the volatility that has gripped the equity and cryptocurrency markets.

But how long can it last? A Wall Street Journal email newsletter this morning reported:

Bond fund managers remain desperate for government debt that yields attractive returns as yields, which fall when bond prices rise, remain near all-time lows in Europe and the United States.

– WSJ Markets Update, May 25, 2021

Currently, these managers buy foreign bonds in developing countries, which offer higher yields. But these include countries in which the COVID-19 pandemic continues to plague. Their risks are therefore high. And yet, the safe bonds available in the domestic market have yields too low to attract investors.

If and when the Federal Reserve stops artificially keeping these yields low, they are likely to rise. And mortgage rates should be too.

So it seems to me that we are currently playing a waiting game. And, sooner or later, higher mortgage rates are coming.

Mortgage Rates and Inflation: Why Are Rates Rising?

For more information, see our last weekend edition of this report.

Recently

For much of 2020, the general trend for mortgage rates was clearly downward. And a new all-time low was set 16 times last year, according to Freddie Mac.

The most recent weekly record low came on January 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But then the trend reversed and rates went up.

However, most of these increases were replaced by declines in April, although these moderated in the second half of the month. And the month of May has so far seen more rises than falls. Freddie’s May 20 report puts that weekly average at 3.0% (with 0.6 fees and points), up compared to 2.94% the previous week.

Mortgage rate expert forecasts

Longer term, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each have a team of economists dedicated to monitoring and forecasting what will happen to the economy, housing sector and mortgage rates.

And here are their current rate forecasts for the remaining quarters of 2021 (Q2 / 21, Q3 / 21, Q4 / 21) and the first quarter of 2022 (Q1 / 22).

The figures in the table below are for 30-year fixed rate mortgages. The Fannies were updated on May 19 and the MBAs on May 21. Freddie’s forecast is dated April 14. But they are now only updated quarterly. So expect his numbers to start looking out of date soon.

Forecaster T2 / 21 T3 / 21 T4 / 21 Q1 / 22
Fannie Mae 3.0% 3.1% 3.2% 3.3%
Freddie mac 3.2% 3.3% 3.4% 3.5%
MBA 3.1% 3.3% 3.5% 3.7%

However, given so many unknowables, the current crop of forecasts could be even more speculative than usual.

Find your lowest rate today

Some lenders have been frightened by the pandemic. And they limit their offers to the more vanilla mortgages and refinances.

But others remain courageous. And you can always find the refinance, investment mortgage, or jumbo loan you want. You just need to shop more widely.

But, of course, you should be doing a lot of comparison regardless of what type of mortgage you want. As a federal regulator, the Consumer Financial Protection Bureau said:

Buying your mortgage can save you money. It may not sound like a lot, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars during the term of your loan.

Check your new rate (May 25, 2021)

Mortgage rate methodology

Mortgage Reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and an APR for each type of loan to display in our graph. Because we average a range of rates, it gives you a better idea of ​​what you might find in the market. In addition, we average the rates for the same types of loans. For example, fixed FHA with fixed FHA. The end result is a good overview of daily rates and how they have changed over time.


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