Today's mortgage and refinancing rates
Average mortgage rates fell just inches last Friday. And they ended up a little lower than they started last week. But in the midst of unusual volatility, it was a close thing.
Until this morning it looks like it is Mortgage rates could go up today. But it is especially common now for the markets to change direction as the hours go on.
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Current mortgage and refinancing rates
Effective interest rate*
Conventional 30 years
Conventionally fixed for 15 years
Conventional 20 years old
Conventionally fixed for 10 years
30 years permanent FHA
Fixed FTA for 15 years
5/1 ARM FHA
30 years of permanent VA
15 years fixed VA
Prices are provided by our partner network and may not reflect the market. Your price can be different. Click here for an individual price offer. View our rate assumptions here.
Should You Lock A Mortgage Rate Today?
My advice for the past week has been to close your course. And average mortgage rates have fallen during this time. But only a little.
Going forward, it all depends on how economically harmful the Omicron variant of COVID-19 is. (More on this below.) And that is far from clear. So with so much uncertainty the financial conservatives might prefer to lock their rates today. Others may prefer to bet on lower rates by floating further.
I may need to change my personal rate lock recommendations soon. But for now these remain:
HOVER when close in 7th DaysHOVER when close in fifteen DaysHOVER when close in 30th DaysHOVER when close in 45 DaysHOVER when close in 60 Days
> Related: 7 tips for the best refinancing rate
Market Data Affecting Mortgage Rates Today
Here is a snapshot of the current status this morning at around 9:50 a.m. ET. The dates, compared to about the same time last Friday, were:
the 10 year Treasury note yield decreased from 1.45% to 1.38%. (Good for mortgage rates.) More than any other market, mortgage rates usually follow these particular government bond yieldsImportant stock indices were mostly higher shortly after opening. (Bad for mortgage rates.Often times, when investors buy stocks, they sell bonds, which drives the prices of those stocks down and increases yields and mortgage rates. The opposite can happen when the indices are lower. But that's an imperfect relationshipOil prices fell to $ 67.71 from $ 68.98 a barrel. (Good for mortgage rates *.) Energy prices play a major role in the development of inflation and also indicate future economic activity Gold prices rose from $ 1,774 an ounce to $ 1,778. (Neutral for mortgage rates*.) In general, prices are better when gold is rising and worse when gold is falling. Gold tends to rise when investors worry about the economy. And concerned investors tend to cut ratesCNN Business Fear & Greed Index – fell from 26 from 100 to 20. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) when they exit the bond market and invest in stocks, while “fearful” investors do the opposite. So lower values are better than higher
* A change of less than $ 20 in gold prices or 40 cents in oil prices is a fraction of 1%. Therefore, when it comes to mortgage rates, we only count meaningful differences as good or bad.
Why am I saying mortgage rates could go up today when so many of these indicators are showing "good" moves? Because most of these movements happened on Friday. And the driving directions of many markets are less friendly this morning.
Reservations about markets and prices
Before the pandemic and the Federal Reserve's interventions in the mortgage market, you could look at the numbers above and make a pretty good guess as to what would happen to mortgage rates that day. But that is no longer the case. We still use the phone every day. And they are mostly right. But our record for accuracy won't hit its old highs until things settle down.
Use markets only as a rough guide. Because they have to be extraordinarily strong or weak to be able to rely on them. But with this caveat, Mortgage rates are likely to rise today modest. Note, however, that "intraday swings" (when prices change direction during the day) are a common feature these days.
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Important information about current mortgage rates
Here are some things you need to know:
Usually mortgage rates go up when the economy is doing well and go down when the economy is in trouble. But there are exceptions. Read How Mortgage Rates Are Determined And Why You Should Care Only top borrowers (with great credit scores, big down payments, and very healthy finances) get the extremely low mortgage rates you see advertised lenders vary. Yours may or may not follow the crowd when it comes to daily price movements – although they all follow the broader trend over time when daily price changes are small, some lenders adjust closing costs and leave their price lists the same. Funding rates are usually close at the for purchases. And a recent regulatory change has closed a pre-existing loophole
So there is a lot going on here. And no one can claim to know for sure what will happen to mortgage rates in the coming hours, days, weeks, or months.
Are mortgage and refinancing rates rising or falling?
An epic battle is going on behind the scenes in key markets.
On the one hand, the economic dangers that arise from the new Omicron variant are trying to pull mortgage rates down. On the flip side, warm inflation and indications from the Federal Reserve that it is likely to accelerate monetary policy are trying to drive these rates higher.
The Fed has kept mortgage rates artificially low for about 20 months. And it has already been said that it plans to "shorten" (slowly withdraw) this support. But now it suggests that it could go faster.
This would likely also cause it to raise its own interest rates earlier than expected (earlier in 2022), which would affect all floating rate loans, including credit card balances. This of course also includes the interest rates for existing adjustable-rate mortgages (ARMs) whose fixed-rate introduction period has been exceeded.
In theory, the Fed doesn't play a role in setting new mortgage interest rates. In practice, however, raising your own interest rates is likely to increase the upward pressure on these mortgage rates.
And the winner is …
Nobody has any idea which side will win this epic battle. If Omicron hadn't raised its ugly head, mortgage rates would almost certainly have continued to rise in response to inflation, Fed action, and other pressures. And that can still turn out.
But it all depends on how economically Omicron proves to be detrimental. And we can't imagine until public health researchers have had a chance to finally answer three questions about the variant:
How contagious is it? – So far it looks 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 in the same amount of time." Will Omicron produce better or worse health? Results as delta for those who get infected? – The first signs are good. But its initial spread was mainly among young, healthy people. And we won't know for sure until it reaches the general population. Will vaccines and previous infections provide adequate protection? – Nobody knows. Many experts believe that existing vaccines will help reduce hospital stays and deaths. But we're still weeks away from getting enough data to be sure
You have recognized the subject: we just have to wait and see.
What that means for mortgage rates
The principle couldn't be simpler. Mortgage rates tend to rise when the economy is doing well. And fall when it's in trouble.
At the moment the economy is still recovering strongly. But the investors, who largely determine mortgage rates, are trying to look to the future. And they – like the rest of us – cannot see the tips of their noses.
And until their view becomes clearer, they will likely react (sometimes sharply) to passing messages, government statements, and medical research bulletins. So expect a lot of volatility. But little sense of direction.
Further background information can be found in the weekend edition of this daily report from Saturday.
The general trend in mortgage rates was clearly declining for much of 2020. And according to Freddie Mac, it hit 16 new weekly all-time lows last year.
The latest weekly record low was recorded on January 7th when it was 2.65% for 30-year fixed-rate mortgages.
Since then, the picture has been mixed with longer phases of ascent and descent. Unfortunately, the increases have become more pronounced since September, if not constant.
Freddies Dec 2 Report gives this weekly average for 30-year fixed-rate mortgages at 3.11% (with 0.6 fees and points), easy high from the previous week.
Expert predictions for mortgage rates
Looking ahead, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) each have a team of economists devoted to monitoring and forecasting developments in the economy, real estate and mortgage rates.
And here are their current interest 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 apply to 30-year fixed-rate mortgages. Fannies were released on November 18th and the MBAs on November 22nd.
Freddie’s was released on October 15th. It now only updates its forecasts every quarter. So maybe we won't get another of these until January.
ForecastersQ4 / 21Q1 / 22Q2 / 22Q3 / 22Fannie 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, with so many imponderables, all of the current predictions can be even more speculative than usual.
And none of these forecasters suspected that Omicron could completely change the models on which they are based.
Find your lowest price today
Some lenders have been terrified by the pandemic. And they limit their offerings to mortgages and refinancing with the most vanilla flavor.
But others remain brave. And you can still likely find the refinance, investment mortgage, or jumbo loan you want. All you have to do is look around.
But of course, whatever type of mortgage you want, you should make extensive comparisons. As a federal regulator, the Consumer Financial Protection Bureau says:
Real savings can be achieved when looking for your mortgage. It may not sound like a lot, but it does If you save even a quarter interest on your mortgage, you will save thousands of dollars over the life of your loan.
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Mortgage rate methodology
The mortgage reports receive interest rates based on selected criteria from multiple credit partners on a daily basis. We'll find an average interest rate and an APR for each type of loan shown on our chart. By averaging a number of prices, this will give you a better idea of what you might find in the market. In addition, we determine average interest rates for the same types of credit. Example: FHA fixed with FHA fixed. The end result is a good snapshot of the daily rates and how they change over time.