Today’s mortgage and refinance rates 

Average mortgage rates inched lower again on Christmas Eve, meaning the daily figures ended the week where they started it.

Will we see a similarly calm period this week? If anything’s likely to move them much, it’s President Donald Trump’s signing yesterday evening of the pandemic relief bill, which also averted a government shutdown. But, so far today, mortgage rates look likely to rise only modestly. They may even end up holding steady.

Find and lock a low rate (Dec 28th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 28th, 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?

This week could turn into a momentous one. And normally I’d expect some sharp movements in mortgage rates as dramas (see below for details) play out.

But last week also brought plenty of dramatic events. And those rates barely budged during those days. So it’s perfectly possible we will again see little movement.

However, assuming that is a gamble. And mortgage rates are currently at or adjacent to all-time lows. So many will see discretion as the better part of valor and will choose to lock now.

Those who are willing to take on the risk of continuing to float may be rewarded by new all-time lows. But they might be penalized by higher rates.

Personally, I’m not all that brave. So I’d probably lock if my closing date were scheduled for January and float if I had longer to wait. And my personal rate lock recommendations remain:

• 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

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 on Christmas Eve morning, were:

• The yield on 10-year Treasurys inched up to 0.95% from 0.94%. (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 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 $48.06 from $47.81 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 were up at $1,892 from $1,877 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 — Fell to 54 from 55 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 just a little worse for mortgage rates today.

Find and lock a low rate (Dec 28th, 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

Mortgage rates are most likely to edge a little higher today. And they just might hold steady.

The big drama this week was set to be a will-he-or-won’t-he story. But yesterday evening the president signed into law a bill that will deliver pandemic relief and that averts a government shutdown.

In normal times, the president signing this bill should send mortgage rates soaring. But, right now, markets are suggesting those rates will only inch higher today. Indeed, the movement so far is so weak they might hold steady.

Maybe that’s not so surprising. Because last week saw all sorts of dramas (the passage of that bill, a Brexit trade deal, the emergence of a new, more transmissible strain of COVID 19 …), too. And mortgage rates barely budged, ending the week where they started.

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 16 occasions so far this year, according to Freddie Mac. The most recent such record occurred last week — on Dec. 24.

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 (out Dec. 21) are updated monthly. But Freddie’s are now published quarterly. And its latest was released on Oct. 14. So that’s looking distinctly 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	2.8%	2.9%	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 28th, 2020)

Mortgage rate methodology