Today's mortgage and refinancing rates
Average mortgage rates rose yesterday, breaking a series of three consecutive days of decline. But that increase was relatively small and barely made any such recent gains felt. At some point that day, however, the climb seemed much bigger than it turned out to be. Because the first US case of the Omicron variant shocked the markets.
And key markets remain unpredictable today. But until this morning it looks like it is Mortgage rates could stay stable today or be just a few inches on either side of the neutral line. Let's see how long it will last.
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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?
I expect we will likely see increased volatility in mortgage rates in the future. And that means both upward movements and downward movements.
Still, I hope for a time when these prices will fall overall. However, this will depend on the news that emerges regarding the Omicron variant of COVID-19. The greater the threat this variant poses, the further the rates are likely to decrease.
And for the time being, my personal rate lock recommendations 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 roughly the same time yesterday, were:
the 10 year Treasury note yield decreased from 1.48% to 1.43%. (Good for mortgage rates.) More than any other market, mortgage rates usually follow these particular government bond yieldsImportant stock indices were 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 down from $ 68.46 a barrel to $ 64.78. (Good for mortgage rates *.) Energy prices play a major role in the development of inflation and also indicate future economic activity Gold prices decreased from $ 1,788 per ounce to $ 1,770. (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 – dropped from 30 from 100 to 23. (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.
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 be unchanged or hardly changed today. Note, however, that "intraday swings" (when prices change direction during the day) are a common feature these days.
Find your lowest plan. Start here (02.12.2021)
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 To Determine Mortgage Rates And Why You Should Care Only top-tier borrowers (with great credit scores, high down payments, and very healthy finances) will get the ultra-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 usually 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 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?
If the markets pick up the news from South Africa overnight, we could see another drop in mortgage rates today. Because it contained discouraging Omicron data. However, investors seem to have barely noticed this so far.
According to the South African National Institute for Communicable Diseases (NICD), daily COVID-19 infection rates in this country have increased "exponentially" recently. There were 8,561 new cases yesterday. Just a week earlier it had been 1,275. And there is no “winter wave” to explain this increase away. It's summer in the southern hemisphere.
More worrisome, however, is that 74% of all virus genomes sequenced by the NICD in the last month came from Omicron. I'm not a public health researcher, but doesn't that mean the new variant is highly transferable?
If enough investors take up the news and come to the same conclusions as me (they're not public health researchers, either) then mortgage rates could go down today.
By the early hours of that morning, Omicron had been approved in 24 countries on five continents, including the United States.
More than just Omicron
Omicron could ultimately change everything. However, it is most likely to do so if it turns out to be very resistant to existing vaccines. And we won't know anything about it for a while. Surely the experts are divided on the subject, and probably most think that additional resistance is likely to be small.
But whatever the data ultimately proves, there are other forces still trying to drive up mortgage rates. Three important ones come to mind spontaneously:
Inflation – An investor who buys a mortgage-backed security (the type of bond that largely drives mortgage rates) knows that inflation will consume all of his or her earnings (returns) – and then some The Federal Reserve – the Fed artificially holds mortgage rates low for 20 months. However, plans have been announced to gradually withdraw this support over a six-month period. Now it's hinting it could shorten that timeline Debt Limit – If Congress doesn't raise the debt limit within a few weeks, the U.S. Treasury Department will likely default on its debt. That is really unthinkable
Here's why …
Crisis looms over debt ceiling
When the debt ceiling was last threatened in October, the White House pondered the consequences:
… it is expected to be widespread and catastrophic to the US (and global) economy. Given that the US Treasury is the global benchmark safe asset, a default would likely cause a financial crisis and recession. GDP would fall, unemployment would rise and everyday households would be affected in many ways – from foregoing important social program payments such as social security or housing benefits to increased interest rates on mortgages and credit card debt.
– The White House, The Debt Ceiling: An Explainer, October 6, 2021
Notice the mention of "increased mortgage rates". If Congress doesn't raise the debt ceiling before the Treasury Department runs out of money, it could spark economic disaster that dwarfs even the worst of Omicron's scenarios.
Just as this daily report was due to be published, the Wall Street Journal reported:
Democrats and Republicans have reached an agreement to extend government funding through Feb. 18, taking the first step to avoid government shutdown this weekend.
– WSJ, "Democrats and Republicans Reach Deal to Avoid Government Shutdown" (Paywall), December 2, 2021
But I haven't had a chance to explore the details of this deal. And right now, it's Omicron that investors are focusing on.
Further background information can be found in the weekend edition of this daily report from Saturday.
Recently – updated today
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.
Confirm your new price (December 2nd, 2021)
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.