Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday. And the average is just 2 basis points (two one-hundredths of 1 percent) higher than their all-time low. With such a tiny change, few would even notice the difference in their monthly payments. And Freddie Mac unveiled a new low this morning.

Today may see lower mortgage rates. Or judging from how markets have acted earlier this week, they may stay much the same. Any change today will likely be triggered by the finalizing of a trade deal between the European Union and the UK covering “Brexit.” And that should avert some serious damage to the global economy. More below.

Season’s greetings! We’ll be off tomorrow. But our usual weekend edition will be online on Saturday.

Find and lock a low rate (Dec 24th, 2020)

Current mortgage and refinance rates 

Find and lock a low rate (Dec 24th, 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?

It feels as if it’s been a serious week for news. Congress passed a pandemic relief bill. Then the president demanded changes to it. Then new, more transmissible strains of COVID-19 emerged in the UK and South Africa. And finally, a Brexit deal was agreed today. We might have seen significant volatility for mortgage rates in response to each and every one of those.

But we didn’t. Mortgage rates have barely moved so far this week.

And that means it hasn’t mattered much whether you decided to lock or to continue to float. Indeed, that may continue to be the case over the holiday. It would be no surprise if these rates remained within a tight range until at least Jan. 2.

But there’s always a risk-reward calculation to be made when reaching these decisions. And, personally, I think the potential benefits of floating are likely too limited to outweigh the ever-present (if unlikely) danger of a sudden upward movement.

So I’d probably lock if my closing date were scheduled for January. 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

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 fell to 0.94% from 0.96%. (Good 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 and barely moving 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 rose to $47.81 from $47.67 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: down to $1,877 from $1,880 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 55 from 61 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 better for mortgage rates today.

Find and lock a low rate (Dec 24th, 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 fall or hold steady today.

So much for a quiet week leading up to Christmas. Today’s big news is an agreement between the European Union (EU) and Britain over a trade deal.

Britain has been a member state of the EU for 40+ years but decided to withdraw (“Brexit”) from the trading bloc in a 2016 referendum. However, leaving without any trading arrangement was always likely to cause significant economic harm to both sides — and to the global economy.

Today’s agreement (which must still be ratified by both sides’ parliaments) reduces that damage. But certainly doesn’t eliminate it. Still, it’s way better than the “no-deal Brexit” that many had anticipated.

In more normal times, you might have expected mortgage rates to rise on the good Brexit news. And, yesterday, CNBC was explaining Treasury yield rises (which mortgage rates often shadow) as a result of optimism over Brexit.

But this morning it was explaining falling yields using the same reason. Strange. But it also provided another, more compelling reason for these falls:

Republicans in the House of Representatives on Thursday blocked an attempt from House Democrats to pass $2,000 direct payments to Americans, as the fate of a coronavirus relief package passed by Congress hangs in the balance.

— CNBC, Dec 24 20206:48 a.m. EST

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 today — 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 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 24th, 2020)

Mortgage rate methodology