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Mortgage And Refinance Rates, Dec. 20

Today’s mortgage and refinance rates

Average mortgage rates climbed appreciably yesterday. Add in last Friday’s smaller rise and it pretty much wipes out last Thursday’s worthwhile fall.

By approaching 10 a.m. (ET), it was looking as if mortgage rates today might rise again. If that early momentum survives the day, that will make the third consecutive rise for those rates.

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 6.271% 6.306% +0.15%
Conventional 15 year fixed 5.66% 5.714% +0.1%
Conventional 20 year fixed 6.143% 6.197% +0.08%
Conventional 10 year fixed 5.862% 5.985% +0.19%
30 year fixed FHA 6.171% 6.915% +0.08%
15 year fixed FHA 5.823% 6.318% +0.16%
30 year fixed VA 5.975% 6.205% +0.18%
15 year fixed VA 6.194% 6.553% +0.32%
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.

Changes to the following list are on hold until we can see how recent rises play out.

So, for now, my personal rate lock recommendations 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 3.70% from 3.58%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
  • Major stock indexes were mostly lower 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 increased to $75.55 from $75.36 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
  • Gold prices nudged up to $1,818 from $1,800 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.
  • CNN Business Fear & Greed index — fell to 37 from 42 out of 100. (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 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, I wrote about my concerns about mortgage rates rising last Friday and this Monday. I feared those increases were a sign that investors were having second thoughts about the euphoria with which they greeted last Wednesday’s Federal Reserve events.

Unsurprisingly, yesterday’s appreciable rise did little to reassure me. I’m not saying things are bound to get darker for mortgage rates. I still hope they won’t. But the sunny optimism I felt over the weekend has begun to melt away.

I did feel a little more reassured reading yesterday evening’s analysis by Mortgage News Daily (MND). It shrugged off those recent rises as merely seasonal volatility.

And it’s certainly true that markets tend to be more volatile over the holiday season when many senior investors and traders take a break. Without their steadying hand, the remaining staff can easily overreact to minor news. MND suggests staying calm until the second week in January when things are likely to return to normal.

MND has its finger firmly on the pulse of the bond market that largely determines mortgage rates. And I know that what it said yesterday is typically true.

Bond investors’ debate

However, I can’t shake off my nagging fear that we’re witnessing that market revisiting its initial response to last week’s Fed events. That’s partly because I thought that reaction was irrational at the time.

I may not be alone because investors appear divided on the subject. Here’s what yesterday’s Wall Street Journal (paywall) had to say (Treasury bonds are closely related to mortgage rates):

“Many investors and bond analysts remain far from convinced that the pain is over for Treasurys. They argue that a still-tight labor market could keep inflation elevated and force the Fed to raise rates higher than the market currently expects, even if economic growth does turn negative over the next 12 months.

“Still, bond investors, as a whole, remain more hopeful on inflation, more worried about economic growth and more skeptical that the Fed will be able to raise interest rates much higher—all of which have provided a boost for Treasurys in recent weeks after an otherwise terrible year for bond returns.”

We’ll have to wait to see which group wins this debate.

For more background, 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. 15 report put that same weekly average at 6.31%, very slightly down from the previous week’s 6.33%.

Recently, 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 — Updated today

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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