Today’s mortgage and refinance rates 

Average mortgage rates just inched lower last Friday. And they ended last week very slightly lower than they started it. But, amid unusual volatility, it was a close-run thing.

So far this morning, it’s looking as if mortgage rates today might rise. But it’s especially common now for markets to change direction as the hours pass.

Find your lowest rate. Start here (Dec 6th, 2021)

Current mortgage and refinance rates 

Should you lock a mortgage rate today?

My advice for the last week has been to float your rate. And average mortgage rates have dropped over that time. But only very slightly.

For the future, everything depends on how economically damaging the Omicron variant of COVID-19 turns out to be. (More on that below.) And that’s far from clear. So, amid so much uncertainty, the financially conservative might prefer to lock their rates today. Others may prefer to gamble on lower rates turning up by continuing to float.

I may well have to change my personal rate lock recommendations soon. But, for now, those remain:

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

>Related: 7 Tips to get the best refinance rate

Market data affecting today’s mortgage rates 

Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time last Friday, were:

• The yield on 10-year Treasury notes fell to 1.38% from 1.45%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mostly higher soon after 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 may happen when indexes are lower. But this is an imperfect relationship
• Oil prices fell to $67.71 from $68.98 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity 
• Gold prices inched up to $1,778 from $1,774 an ounce. (Neutral for mortgage rates*.) In general, it is 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 20 from 26 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

Note

Why am I saying mortgage rates might rise today when so many of those indicators are showing “good” movements? Because most of those movements happened on Friday. And many markets’ directions of travel this morning are less friendly.

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. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.

So use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to rise modestly. But be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Find your lowest rate. Start here (Dec 6th, 2021)

Important notes on today’s mortgage rates

Here are some things you need to know:

1. 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
2. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
3. 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
4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
5. Refinance rates are typically close to those for purchases. And a recent regulatory change has narrowed a gap that previously existed

So a lot is 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

An epic struggle is underway behind the scenes in key markets.

On the one side, the economic dangers created by the new Omicron variant are trying to pull mortgage rates lower. On the other, warm inflation and hints from the Federal Reserve that it’s likely to accelerate its tightening of its monetary policy are trying to push those rates higher.

The Fed has been keeping mortgage rates artificially low for about 20 months now. And it’s already said that it plans to “taper” (slowly withdraw) that support. But now it’s hinting that it may do so more quickly.

That would also likely see it hike its own interest rates sooner than expected (earlier in 2022), which would have a knock-on effect on all variable-rate loans, including credit card balances. Of course, that also includes rates on existing adjustable-rate mortgages (ARMs) that are past their fixed-rate introductory period.

In theory, the Fed plays no part in determining rates for new mortgages. But, in practice, its hiking of its own rates is likely to add more upward pressure on those mortgage rates.

And the winner is …

Nobody yet has a clue which side will win this epic struggle. If Omicron hadn’t reared its ugly head, mortgage rates would almost certainly have continued to rise in response to inflation, Fed actions and other pressures. And that may still turn out to be the case.

But it all depends on how economically damaging Omicron turns out to be. And we can’t begin to guess that until public health researchers have had a chance to definitively answer three questions about the variant:

1. How infectious is it? — So far, that’s looking bad. Yesterday, The Guardian reported, “Tom Wenseleers, an evolutionary biologist at the Catholic University of Leuven in Belgium, estimates that Omicron can infect three to six times as many people as Delta, over the same time period”
2. Will Omicron produce better or worse health outcomes than Delta for those who become infected? — The early signs are good. But its initial spread has mostly been among young, healthy people. And we won’t know for sure until it reaches the general population
3. Are vaccines and past infections going to provide adequate protections? — Nobody knows. Many experts think that existing vaccines will help reduce hospitalizations and deaths. But we’re weeks away from getting enough data to be sure

You’ve spotted the theme: We’re just going to have to wait and see.

What this means for mortgage rates

The principle couldn’t be more straightforward. Mortgage rates tend to rise when the economy’s doing well. And fall when it’s in trouble.

Right now, the economy’s still recovering strongly. But the investors who largely determine mortgage rates are trying to peer into the future. And they — like the rest of us — can’t see the ends of their noses.And, until their view becomes clearer, they’re likely to respond (sometimes sharply) to passing news stories, government statements and medical research bulletins. So expect lots of volatility. But little sense of direction.

For more background, read Saturday’s weekend edition of this daily report.

Recently

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages.

Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, since September, the rises have grown more pronounced, though not consistently so.

Freddie’s Dec. 2 report puts that weekly average for 30-year, fixed-rate mortgages at 3.11% (with 0.6 fees and points), slightly up from the previous week.

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 rate forecasts for the remaining, current quarter of 2021 (Q4/21) and the first three quarters of 2022 (Q1/22, Q2/22 and Q3/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Nov. 18 and the MBA’s on Nov. 22.

Freddie’s were released on Oct. 15. It now updates its forecasts only quarterly. So we may not get another from it until January.

Forecaster	Q4/21	Q1/22	Q2/22	Q3/22
Fannie Mae	3.1%	3.2%	3.3%	3.3%
Freddie Mac	3.2%	3.4%	3.5%	3.6%
MBA	3.1%	3.3%	3.5%	3.7%

However, given so many unknowables, the whole current crop of forecasts may be even more speculative than usual.

And none of these forecasters had any idea that Omicron might entirely change the models on which they’re based.

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 6th, 2021)

Mortgage rate methodology