Today’s mortgage and refinance rates 

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

This morning’s outlook hasn’t changed at all from yesterday’s. Mortgage rates look like inching lower again today. But events on Capitol Hill could easily send them higher.

Find and lock a low rate (Dec 8th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 8th, 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?

In the short term, mortgage rates could easily move higher today or later this week. If they do, it will likely be a result of DC politicians agreeing a stimulus package — or at least to avert the government lockdown due on Friday evening.

So, if you’re near to closing, you might well want to lock now — unless your faith in those in the nation’s capital is very low indeed. Further ahead, more small falls look likely to me.

It’s up to you whether you choose to wait for those in the hope I’m correct. But bear in mind that these rates are currently very close to a fresh all-time low. Is it worth the risk?

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 fell to 0.90% from 0.94%. (Good 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 mostly lower on 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 happens when indexes are lower
• Oil prices inched down to $45.66 from $45.72 a barrel. (Neutral for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
• Gold prices rose to $1,876 from $1,850 an ounce. (Good 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 — Moved down to 80 from 88 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

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 better for mortgage rates today. However, there’s a good chance that won’t last.

Find and lock a low rate (Dec 8th, 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

Perhaps we should start with a remark made yesterday in Mortgage News Daily:

But mortgage rates are here to tell you that 2020 is different. They’re breaking all the old rules and making their own. 

— Mortgage Rates Living Their Own Life By Their Own Rules, Matthew Graham, Dec. 7, 2020

The message of that is that people like me are much less reliable at predicting the direction of mortgage rates than we (perhaps) once were. And that’s probably true.

But I’m still fairly confident that mortgage rates are going to continue inching lower over coming months as the pandemic rages. But that they’ll sometimes move modestly higher for hopefully brief periods.

And one such period of higher rates may well arise this week. The US Congress should currently be obsessed with two challenges. To:

• Pass a stimulus bill that will put cash into the pockets of millions of struggling Americans
• Avert a government shutdown that, absent action, will begin on Friday evening

If you think politicians will meet those challenges, you should expect somewhat higher rates for a while. But the timings are anyone’s guess: when the measures might be passed and for how long they’ll affect mortgage rates.

Until real hope emerges that action will be taken, mortgage rates might continue to inch lower or hold steady.

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 only to purchase mortgages 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 exceedingly close 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 so is beginning to look dated.

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 …

And another forecast

On Dec. 2, the National Association of Realtors threw its hat into the forecasting ring. It said:

The forecast anticipates mortgage rates will begin slowly going up toward the last half of 2021, reaching 3.4% by the end of the year.

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 8th, 2020)

Mortgage rate methodology