Mortgage and refinance rates today, May 12, 2022

Today’s mortgage and refinance rates

Average mortgage rates just inched higher yesterday. That counts as a win after inflation data that morning came in hotter than expected.

Mortgage rates today look likely to fall. But we saw yesterday how those rates can start off moving strongly in one direction only to slow dramatically or even to U-turn.

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.

It’s still way too soon to conclude that this week’s rate falls are the start of a sustained turnaround in 2022’s sharply higher trend. Reductions on the scale we’ve seen over the last few days have not been rare this year. And I doubt the latest will prove meaningful. Still, there’s nothing wrong with hoping.

My personal rate lock recommendations for the longer term 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 plunged to 2.86% from 2.98%. (Very good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were sharply lower soon after opening. (Good for mortgage rates.) When investors are buying shares, they’re often selling bonds, which pushes prices of those 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 $105.35 from $105.08 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 down to $1,846 from $1,850 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. And worried investors tend to push rates lower
• CNN Business Fear & Greed index — tumbled to a rare 6 from 24 out of 100. (Very 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 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 might fall. However, be aware that “intraday swings” (when rates change 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?

You could read yesterday’s consumer price index (CPI) figures for April either way. On the one hand, they were a bit higher than economists had forecast. On the other, they were a bit lower than they’d been in March.

Markets faced the same dilemma, starting off seeing the data as bad, pushing mortgage rates strongly higher. And then reassessing so that most of those rates ended the day close to where they started it.

Inflation is the hot topic in markets at the moment. So even reports that for years would have been greeted with a shrug can now cause a stir.

This morning’s producer price index for April falls into that category. According to the Bureau of Labor Statistics: “The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services.” So it’s looking a bit ahead, often measuring prices being paid by wholesalers and large retailers rather than consumers.

The PPI came in earlier today, pretty much as expected. And markets seem to be treating that as good news.

Tomorrow, we’ll see a similar forward-looking measure of inflation, the import price index. That will tell us the direction of prices of imports landed into the country during April. And, again, goods are often entering the supply chain rather than being bought immediately by consumers.

Neither of these reports is as famous as the CPI. But they give economists and markets clues about where inflation is heading. So they just might affect mortgage rates, typically sending them higher for hotter-than-expected numbers and down for cooler ones. But we saw as recently as yesterday how unpredictable markets can be over economic reports.

Read the weekend edition of this daily article for more background.

Recent trends — updated today

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions that year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, 2021, when it stood at 2.65% for 30-year fixed-rate mortgages.

Rates then bumbled along, moving little for the following eight or nine months. But they began rising noticeably that September. Unfortunately, they’ve been shooting up since the start of 2022.

Freddie’s May 12 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.3% (with 0.9 fees and points), up from the previous week’s 5.27%. But that will have missed some of the falls on days later in the week.

Note that Freddie expects you to buy discount points (“with 0.9 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would be closer to the ones we and others quote.

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 current rate forecasts for the remaining three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Apr. 19, Freddie’s on Apr. 18, and the MBA’s on Apr. 13.

Forecaster	Q2/22	Q3/22	Q4/22	Q1/23
Fannie Mae	4.6%	4.5%	4.5%	4.5%
Freddie Mac	4.8%	4.8%	5.0%	5.0%
MBA	4.7%	4.8%	4.8%	4.8%

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. I’m afraid I’m less optimistic than any of them.

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.