Today’s mortgage and refinance rates 

Average mortgage rates edged lower on Friday. So they’re certainly in all-time-low territory. And it looks as if those rates might hold steady or even inch lower again today.

You might have been expecting mortgage rates to rise today in response to Congress agreeing on a $900-billion pandemic relief package. But there was little sign of that first thing. Read on for something that might be spooking investors — and that could lead to lower mortgage rates in coming days.

Find and lock a low rate (Dec 21st, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 21st, 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?

I’ve recently been saying that I think mortgage rates may remain largely unchanged over the holiday period. And that might still turn out to be the case.

But something arose over the weekend that could change that. See “Are mortgage rates rising or falling?” (below) for information on the emergence of a new, more infectious strain of COVID-19.

It’s too soon to say how spooked investors will be by this phenomenon. But, if it bothers them a lot, we could see lower mortgage rates in spite of the holiday. And you may prefer to hold off on locking until things become clearer.

I’m not changing my personal rate lock recommendations yet, but be aware I may do so soon:

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

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 last Friday morning, were:

• The yield on 10-year Treasurys rose to 0.93% from 0.92%. (Good for mortgage rates because they’ve been falling this morning) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
• Major stock indexes were 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 fell to $47.24 from $48.82 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
• Gold prices barely moved to $1,887 from $1,888 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 — Moved down to 62 from 63 out of 100 last Friday evening. (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 quiet-to-good for mortgage rates today.

Find and lock a low rate (Dec 21st, 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

Judging from early trading, mortgage rates may hold steady or move modestly lower today. But, of course, that could change during the day.

New, more contagious COVID-19 strain

Any fall will be in the teeth of Congress agreeing on a pandemic relief package. And will likely be down to a new, more contagious version of the COVID-19 virus. This is up to 70% more transmissible than the existing strain.

Scientists say there is as yet no evidence that the new version causes more acute symptoms than the current strain. Nor that it is more resistant to vaccines. But a superspreader virus is clearly a real threat to communities and economies.

So far, the new strain is known to be active only in southeast England and South Africa. And several European countries initiated complete bans on travel from the UK within hours of the British government announcing its concerns. The US is yet to follow suit.

Of course, there’s a high probability that the new strain, which was first spotted in September, has already spread across several continents. What changed last Friday was that scientists were able to establish a causal link between it and higher infection rates.

We can’t yet know how spooked investors will be over this new version of the coronavirus. But early signs are that they’re taking it seriously. And that could send mortgage rates downward.

Recently

Over the last several months, the overall trend for mortgage rates has clearly been downward. And a new, weekly all-time low has been set on 15 occasions so far this year, according to Freddie Mac. The most recent such record occurred last week — on Dec. 17.

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).

However, note that Fannie’s (released on Dec. 15) and the MBA’s (Nov. 17) are updated monthly. But Freddie’s are now published quarterly. And its latest was released on Oct. 14. So that’s beginning to look stale.

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%	2.7%	2.7%	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 21st, 2020)

Mortgage rate methodology