Mortgage rates for Jan. 17, 2022: Mixed rate reactions to treasury bond spike
Rate mortgage rates are a bit of a mixed bag today, Jan. 17, 2022: Fixed rate loans haven’t moved much day over day (DOD), while adjustable rate mortgages (ARMs) are ticking upward. To see rates moving in different directions across various loan types is a bit of a surprise given recent developments in the bond market.
Economists expecting early 2022 rate hikes
On Friday, Jan. 14, 2022, 30-year Treasury bond yields increased 7 basis points — a veritable spike in terms of treasury bond movement — which left many industry observers anticipating a rate surge. That rate hike may still come, but for today at least, some loan types are holding firm.
Looking toward the not-too-distant future, there are plenty of reasons to think that a rate increase may still happen sooner rather than later. First and foremost: the Federal Reserve’s tapering activity continues to accelerate, and many expect it to ramp up federal fund rates starting as early as March 2022.
The signs point to a pending rate hike, but we’re not there just yet. Locking in your rate now could be the way to go if rates do, in fact, increase soon. That way, you can guarantee yourself a competitive interest rate on a traditional or cash-out refi.
30-year fixed rate
Interest rates on 30-year fixed rate loans haven’t budged at all today. Even looking at week-over-week (WOW) movement, there hasn’t been any change. Month-over-month (MOM) is a different story, though: Mortgage rates are significantly higher today than they were a month ago. If you fit our borrower profile, your monthly mortgage payment would be $1,347.13.*
- Today’s rate: 3.500%
- DOD change: 0
- WOW change: 0
- MOM change: up 50 basis points**
- Today’s APR: 3.597%
- DOD change: 0
- WOW change: 0
- MOM change: up 50.4 basis points
15-year fixed rate
The situation’s been roughly the same with 15-year fixed rate loans. Day-over-day, rates are holding firm. But they’ve gone up a bit compared with their positions last week and last month. At the moment, you’d spend $2,035.86* on your mortgage each month using this type of loan.
- Today’s rate: 2.750%
- DOD change: 0
- WOW change: up 12.5 basis points
- MOM change: up 37.5 basis points
- Today’s APR: 2.918%
- DOD change: 0
- WOW change: up 12.6 basis points
- MOM change: up 37.9 basis points
FHA 30-year fixed rate
FHA 30-year fixed rate loans are the big anomaly today. Unlike conventional fixed rates, which are holding firm, and ARM loans, which have gone up, FHA mortgage rates have actually decreased today. That being said, the downturn is relatively mild, and interest rates are still higher now than they were a month ago. If you locked in your rate today, your mortgage payment would be $1,326.29.*
- Today’s rate: 3.375%
- DOD change: down 12.5 basis points
- WOW change: down 12.5 basis points
- MOM change: up 25 basis points
- Today’s APR: 4.165%
- DOD change: down 12.9 basis points
- WOW change: down 12.9 basis points
- MOM change: up 25.7 basis points
7-year ARM
Now we’re feeling the impact of that treasury bond increase. Interest rates on 7-year ARM loans have gone up significantly today, especially when you look at month-over-month rate movement. With these loan terms, you’d pay $1,389.35* on your monthly mortgage installments.
- Today’s rate: 3.750%
- DOD change: up 25 basis points
- MOM change: up 100 basis points
- Today’s APR: 3.311%
- DOD change: up 11.9 basis points
- MOM: up 47 basis points
10-year ARM
Like the 7-year ARM, rates on 10-year ARM loans are up both day over day and month over month. However, mortgage rates for this type of loan have actually dropped a bit from where they stood last week. That just goes to show how volatile interest rate activity has been lately. As of today, though, your mortgage payment on a 10-year ARM would be $1,326.29.*
- Today’s rate: 3.375%
- DOD change: up 12.5 basis points
- WOW change: down 25 basis points
- MOM change: up 62.5 basis points
- Today’s APR: 3.225%
- DOD change: up 7.8 basis points
- WOW change: down 15.7 basis points
- MOM change: up 38.4 basis points
Today’s takeaway
Despite the recent spike in 30-year treasury bond yields, not all loan types responded in kind. While we did see a rate increase on ARM loans today, Jan. 17, 2022, fixed rate loans are holding firm. And FHA rates actually went down.
Don’t expect that resilience to last forever, though. With the Federal Reserve continuing to fight inflation through accelerated tapering activity, a rate increase seems inevitable. When that rate hike is coming is the million-dollar question. Given the current rate volatility, it’s tempting to take a wait-and-see approach and hope that rates bottom out. But that’s a gamble if you’re looking to refinance your mortgage, take out a cash-out refi or buy a new house sometime soon.
Locking in your rate today could net you the most favorable lending terms you may see in the coming weeks and months. Ready to get started on a refinance? Talk to one of our mortgage specialists today.
Disclaimer
*Above scenarios assume a first lien position, 40 day rate lock on a primary residence and are subject to change without notice. Subject to underwriting guidelines and applicant’s credit profile. The actual interest rate, APR and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Lender. Contact Rate for more information and up to date rates
**Basis points measure the percentage change on interest rates. One basis point represents a 0.01% shift.
Interest rates are based on a borrower profile fitting the following criteria:
- Zip code: 60031
- Home type: Single-family house
- Purchase price: $375,000
- Down payment: 20% ($75,000)
- Mortgage balance: $300,000
- FICO score: 740+
- Military member: No
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