Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday, likely bringing yet another all-time low. And conventional loans started out this morning at 3.063% (3.063% APR) for a 30-year, fixed-rate mortgage. 

I continue to think falls will outweigh rises for the foreseeable future. But there are now some short-term threats (see below) that might bring a fairly brief period of moderate rises.

And that may be starting today. Even a disappointing employment situation report this morning hasn’t dampened optimism. And I’m expecting a small rise in mortgage rates today.

Find and lock a low rate (Dec 4th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 4th, 2020)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

Freddie Mac called another all-time low yesterday. And we’ve just had another tiny drop since. So this might be a great opportunity to lock your rate.

I think we’ll probably see further falls and more all-time lows over time. But do you have time to wait for them?

Because we may be in for a briefish period when they move upward a little. So might you have to close while they’re temporarily higher? If that’s a possibility for you, today’s an excellent day to lock — if you get your skates on.

See “Are mortgage and refinance rates rising or falling?” (below) for more details. Meanwhile, my personal rate lock recommendations are:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

But with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Market data affecting today’s mortgage rates 

Here’s the state of play this morning at about 9:50 a.m. (ET). The data, compared with about the same time yesterday morning, were:

• The yield on 10-year Treasurys rose to 0.96% from 0.93%. (Bad for mortgage rates) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
• Major stock indexes were moderately higher on opening. (Bad 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 happens when indexes are lower
• Oil prices rose to $45.87, up from $45.03 a barrel. (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
• Gold prices were up at $1,849 from $1,838 an ounce. (Neutral for mortgage rates*.) In general, it’s 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 — Inched up to 86 from 85 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

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. The Fed is now a huge player and some days can overwhelm investor sentiment.

So use markets only as a rough guide. They have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. But, with that caveat, so far they’re looking a bit worse for mortgage rates today.

Find and lock a low rate (Dec 4th, 2020)

Important notes on today’s mortgage rates

Here are some things you need to know:

1. The Fed’s ongoing interventions in the mortgage market (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. So expect short-term rises as well as falls. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
2. 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
3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
4. 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
5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
6. Refinance rates are typically close to those for purchases. But some types of refinances from Fannie Mae and Freddie Mac are currently appreciably higher following a regulatory change

So there’s a lot 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

Today, I’m expecting a worse day for mortgage rates. This morning’s employment situation report saw the economy continuing to add jobs. But much more slowly than would be necessary for a quick recovery from the pandemic downturn.

However, even that wasn’t enough to turn markets off riskier investments. And that may be because three threats to low rates have arisen, the first two recently:

1. Progress may be being made in the US Congress toward an agreement on a stimulus bill. Might one finally emerge?
2. A deal on oil production caps was reached yesterday by members of the Organization of Petroleum Exporting Countries (OPEC) and Russia. And oil and copper prices rose
3. There’s a chance the Federal Reserve will announce policy direction changes on Dec. 16, following the next meeting of its policy committee. It’s possible one or more such changes could push up mortgage rates

I believe these are mostly short-term threats. And that the economic damage being wreaked by the pandemic will keep mortgage rates generally low for many months to come. For example, millions of Californians are on the brink of enduring the state’s strictest containment measures since the spring. But, of course, I might turn out to be wrong.

Recently

Over the last few months, the overall trend for mortgage rates has clearly been downward. And a new all-time low was set during each of the weeks ending Oct. 15 and 22, Nov. 5 and 19 and Dec. 3, according to Freddie Mac. Indeed, there have been 14 such weekly records so far this year.

However, note that Freddie’s figures relate to purchase mortgages alone and ignore refinances. And if you average out across both, rates have been consistently higher than the all-time low since a record set in early August, though they’re very close indeed now. The gap between the two has been widened by a controversial regulatory change.

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 rates forecasts for the last quarter of 2020 (Q4/20) and the first three of 2021 (Q1/21, Q2/21 and Q3/21).

But note that Fannie’s (released on Nov. 17) and the MBA’s (also Nov. 17) are updated monthly. However, Freddie’s are now published quarterly. And its latest was released on Oct. 14.

The numbers in the table below are for 30-year, fixed-rate mortgages:

Forecaster	Q4/20	Q1/21	Q2/21	Q3/21
Fannie Mae	2.8%	2.8%	2.8%	2.8%
Freddie Mac	3.0%	3.0%	3.0%	3.0%
MBA	2.9%	3.0%	3.0%	3.2%

So predictions vary considerably. You pays yer money …

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.

Verify your new rate (Dec 4th, 2020)

Mortgage rate methodology