Today’s mortgage and refinance rates

Average mortgage rates edged higher again yesterday. So Tuesday’s modest fall wasn’t the start of a new direction of travel. In a statement this morning, Freddie Mac said, “Mortgage rates have effectively been moving sideways despite the increase in new COVID cases.”

Earlier, the key market was hardly moving. So we’ll say mortgage rates today are likely to be unchanged or barely changed. But the market might begin to be more active as the hours pass.

Find your lowest rate. Start here (Dec 31st, 2021)

Current mortgage and refinance rates

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.398% 3.419% +0.06%
Conventional 15 year fixed 2.553% 2.589% +0.07%
Conventional 20 year fixed 3.142% 3.175% +0.06%
Conventional 10 year fixed 2.699% 2.767% +0.08%
30 year fixed FHA 3.29% 4.004% +0.09%
15 year fixed FHA 2.643% 3.289% +0.05%
5/1 ARM FHA 2.525% 3.248% +0.03%
30 year fixed VA 3.171% 3.363% +0.15%
15 year fixed VA 2.94% 3.288% +0.03%
5/1 ARM VA 2.5% 2.533% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Should you lock a mortgage rate today?

Little has changed since yesterday. If you’re convinced that the new Omicron variant of COVID–19 will cause sustained damage to the economy, you should float your rate. But if you believe it will have barely any impact, you should lock.

That’s because mortgage rates almost always rise when the economy’s doing well and fall when it isn’t. Of course, if you’re like me and have no idea what impact Omicron might have, then you can wait and see or flip a coin.

Sorry to be so unhelpful. But the reality is nobody can be sure. Still, pending solid information, my personal rate lock recommendations 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 yesterday, were:

  • The yield on 10-year Treasury notes edged up to 1.54% from 1.52%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
  • Major stock indexes were 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 rose to $76.88 from $75.70 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
  • Gold prices edged higher to $1,809 from $1,794 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 – climbed to 65 from 61 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

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

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 are unlikely to move far. However, 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 31st, 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.

A lot is going on at the moment. 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?

It looks to me as if markets are on the financial equivalent of a sugar rush. The S&P stock index closed yesterday at its 70th all–time high this year. Investors are making a lot of money and don’t want to stop.

You might struggle to think of another reason why markets continue to ignore the economic threats of Omicron. True, nobody can yet be sure just how damaging the new variant might prove.

But we can already see plenty of damage, including full lockdowns in some European countries and Asian cities and extensions of working–from–home policies. Here at home, we’ve seen thousands of flight cancellations, companies delaying their back–to–the–office initiatives and cities halting or scaling back their New Year celebrations.

Health implications

And that’s before considering the health implications. Some hospitals are warning that they’re at risk of being overwhelmed. And that’s no surprise as daily infections have soared 60% over the last week, according to the Centers for Disease Control yesterday. The New York Times reckons they’re up 153% over the last 14 days.

Yes, early data suggest that a much smaller proportion of those infected will go on to require hospitalization or to die. But, with so many new cases, that small proportion is a big number. Already, hospitalizations are up 14% over the last seven days. And deaths may follow.

That would be no surprise. There’s obviously a time lag between catching the coronavirus, requiring hospitalization and later dying. That often takes several weeks. And we’re not several weeks into the Omicron wave.

Will markets pay attention?

Obviously, I’ve just painted a very bleak picture. And we might yet be pleasantly surprised by how Omicron affects the country and the world.

But I’m surprised that markets appear to be completely ignoring the new variant’s possible threats. It seems strange to me that we’re seeing record stock index closings and climbing Treasury yields and mortgage rates at such a time.

Will markets come down from their sugar rush once the “Santa Claus rally” is over? Might mortgage rates fall as we begin 2022? I can’t be sure. But I suspect they might.

Recently – Updated today

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. 30 report puts that weekly average for 30–year, fixed–rate mortgages at 3.11% (with 0.7 fees and points), up from the previous week’s 3.05%.

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 Dec. 20 and the MBA’s on Dec. 21.

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

Forecaster Q4/21 Q1/22 Q2/22 Q3/22
Fannie Mae 3.1% 3.1%  3.2% 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.

Find your lowest rate today

You should comparison shop 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.

Show me today’s rates (Dec 31st, 2021)

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.



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