Today’s mortgage and refinance rates 

Average mortgage rates inched higher yesterday, but only by the smallest measurable amount. Many will still be able to lock at their all-time low.

Yesterday’s news of a fast-spreading new COVID-19 strain emerging in the UK pulled mortgage rates lower that morning. But it didn’t keep them low for long. This morning, markets are quiet. And I’m expecting these rates to be unchanged or barely changed.

Find and lock a low rate (Dec 22nd, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 22nd, 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?

Stand down! Yesterday, I wondered whether the news of a novel strain of more infectious COVID-19 would spook investors and drag mortgage rates appreciably lower.

But that seems not to be the case. Of course, it’s possible that a slow-burn realization of the implications of the virus will eventually lead to lower rates. But, so far, it’s not looking likely.

So we’re back to the weekend’s advice. And that’s for most people with January closing dates to lock now while rates are at or near record lows. Yes, it’s possible you could miss out on further falls. But I personally think those are likely to be limited and not worth the risk of rises.

So my personal rate lock recommendations are:

• 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 yesterday morning, were:

• The yield on 10-year Treasurys held steady at 0.93%. (Neutral 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 fell to $47.07 from $47.24 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 barely moved to $1,879 from $1,887 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 — Edged higher to 64 from 62 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 22nd, 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

So far this morning, markets are looking quiet. And I’m expecting mortgage rates today to be unchanged or barely changed.

If the scary new strain of superspreading COVID-19 didn’t bring down mortgage rates yesterday, it perhaps never will. Or maybe it did exert downward pressure but that was canceled out by upward pressure resulting from Congress passing pandemic relief measures.

Either way, so far this morning markets are looking pretty directionless. And the holiday doldrums I’ve been predicting may be upon us — barring exceptionally good or bad news.

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 — updated today

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 yesterday — Dec. 21) 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	2.8%	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 22nd, 2020)

Mortgage rate methodology