Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday, returning to the recent all-time low. They’ve stayed within a narrow range throughout this month, moving up or down by a single basis point (one-hundredth of one percent) on all but two days.

Mortgage rates may well be unchanged or barely changed today, too. But there are a couple of risk factors that could push them higher: a Federal Reserve announcement this afternoon, and any progress toward a pandemic relief package in Washington D.C.

Find and lock a low rate (Dec 16th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 16th, 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?

If you think the Federal Reserve will, this afternoon, undermine the property market by curbing or ending its purchases of mortgage-backed securities (within its asset purchase program), you should probably lock your rate now.

Personally, I doubt that. But, if I’m wrong and it happens, mortgage rates will probably rise — perhaps by a lot and for a long time.

If the Fed does nothing, we may well be in for a holiday lull with only inconsequential movements in these rates. And I’m guessing the falls will slightly outweigh the rises.

But one exception could be the legislative passage (if any) of a pandemic relief package. That might push them moderately higher for a while. And there’s always a chance of some unforeseen event disrupting markets. So floating is always a gamble.

See “Are mortgage and refinance rates rising or falling?” (below) for more details. Meanwhile, with my gambler’s hat on, 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 0.93% from 0.91%. (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 mixed on 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 happens when indexes are lower
• Oil prices were higher at $47.40 from $47.25 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 $1,861 from $1,853 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 higher to 72 from 70 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 quiet for mortgage rates today.

Find and lock a low rate (Dec 16th, 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

I’m expecting mortgage rates to be unchanged or barely changed today. But that assumes the Federal Reserve doesn’t halt or reduce its interventions in the mortgage market. If it does, they could rise sharply.

They could also rise modestly if the Fed’s economic forecasts (also out this afternoon) are rosier than expected.

And the other thing that could push rates a bit higher is a political matter. Might Congress move closer to agreeing on a law providing economic relief from the COVID-19 pandemic?

Lawmakers don’t have had to dot every i and cross every t. They just have to provide a realistic prospect of a deal for mortgage rates to increase a little, probably briefly.

But, aside from those, I’m expecting mortgage rates to continue to drift very slowly lower. But some short periods of rises are inevitable as glimmers of good economic news emerge.

Why that expectation? The pandemic is continuing to wreak havoc in the American and global economies. And a bad economy almost always means lower mortgage rates.

Recently

Over the last few months, the overall trend for mortgage rates has clearly been downward. And a new, weekly all-time low has been set on 14 occasions so far this year, according to Freddie Mac. The most recent such record occurred on Dec. 3. And, on Dec. 10, Freddie reported, “Mortgage rates remain at record lows.”

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 16th, 2020)

Mortgage rate methodology