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Today’s mortgage and refinance rates

Average mortgage rates edged higher again yesterday. And they’re creeping up to their highest level over the last month.

Mortgage rates today look likely to inch higher again. But that might change as the hours pass.

Find your lowest rate. Start here (Dec 15th, 2021)

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.304% 3.326% -0.01%
Conventional 15 year fixed 2.527% 2.562% -0.03%
Conventional 20 year fixed 3.186% 3.224% +0.02%
Conventional 10 year fixed 2.636% 2.699% -0.04%
30 year fixed FHA 3.33% 4.095% Unchanged
15 year fixed FHA 2.593% 3.239% -0.02%
5/1 ARM FHA 2.255% 3.128% +0.02%
30 year fixed VA 3.238% 3.436% +0.03%
15 year fixed VA 2.951% 3.3% +0.08%
5/1 ARM VA 2.497% 2.512% +0.03%
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?

So far this month, mortgage rates have risen on four occasions and fallen on one. So, much as I hate chopping and changing my personal rate lock recommendations, I’m switching them back to Lock today.

But that may change again soon. Right now, investors are taking a sunny view of the likely impact of the Omicron variant of COVID–19. But that could quickly turn around if public health researchers uncover data that shows the strain to be scarier than many currently think.

So, if you believe Omicron will significantly harm the economy, you might choose to continue to float your rate. Because that could bring lower mortgage rates.

However, as of this morning, my personal rate lock recommendations are:

  • 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 rose to 1.50% from 1.45%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
  • Major stock indexes were mixed soon after opening. (Neutral 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 edged higher to $71.79 from $71.58 a barrel. (Neutral for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
  • Gold prices inched down to $1,781 from $1,782 an ounce. (Neutral for mortgage rates*.) In general, it is 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 – increased to 37 from 31 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 better than higher ones

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. 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 modestly. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find your lowest rate. Start here (Dec 15th, 2021)

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 wider 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. And a recent regulatory change has narrowed a gap that previously existed

So a lot is going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today

After a shocked reaction to the first announcement of the discovery of the Omicron variant, markets seem to have adopted a wait–and–see approach. And current trading appears to all but ignore the economic risks the new strain poses.

So, for now, the forces that were trying to push mortgage rates higher before Omicron was discovered are again dominating. We’re not seeing sharp rises in bond yields and mortgage rates. But they’re pretty consistent. And they’re largely driven by warm inflation and the Federal Reserve’s withdrawal of its support for artificially low mortgage rates.

So what I was saying before Omicron – that I expected these rates to gently drift higher – is again applying.

Soon

Markets may well be proved correct in their relaxed view of Omicron’s threats. But nobody yet knows for sure.

Here’s how The Washington Post summed up the situation yesterday:

Anthony S. Fauci, the nation’s top infectious–disease expert, said Tuesday that the omicron variant appears to cause less severe illness – although he cautioned that the available data remains preliminary and anecdotal. But emerging evidence suggests it is more transmissible than previous variants, Fauci said. Meanwhile, a new laboratory study in South Africa shows the omicron variant has significant but not total ability to evade virus–fighting antibodies generated by the Pfizer–BioNTech vaccine.

— Washington Post, “Omicron seems to cause milder illness, Fauci says, as study shows evasion of antibodies” (paywall), Dec. 7, 2021

You might choose to summarize that as “Nobody knows much.” So continue to expect volatility as new data emerge.

For more background, read Saturday’s weekend edition of this daily report.

Recently

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 last year, according to Freddie Mac.

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

Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.

Freddie’s Dec. 2 report puts that weekly average for 30–year, fixed–rate mortgages at 3.11% (with 0.6 fees and points), slightly up from the previous week.

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, current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).

The numbers in the table below are for 30–year, fixed–rate mortgages. Fannie’s were published on Nov. 18 and the MBA’s on Nov. 22.

Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until January.

Forecaster Q4/21 Q1/22 Q2/22 Q3/22
Fannie Mae 3.1% 3.2%  3.3% 3.3%
Freddie Mac 3.2% 3.4%  3.5% 3.6%
MBA 3.1% 3.3%  3.5% 3.7%

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

And none of these forecasters had any idea that Omicron might entirely change the models on which they’re based.

Find your lowest rate today

Some lenders have been spooked by the pandemic. And they’re restricting their offerings to just the most vanilla–flavored mortgages and refinances.

But others remain brave. And you can still probably find the cash–out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.

But, of course, you should be comparison shopping 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.

Show me today’s rates (Dec 15th, 2021)

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.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.




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