Mortgage and refinance rates today, Dec. 13, 2021

Today’s mortgage and refinance rates

Average mortgage rates inched lower last Friday. And they ended that week pretty much where they started it.

First thing this morning, it looked as if mortgage rates today might fall. But markets are still volatile. So you might want to take all such predictions with a pinch of salt.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

A key, two-day Federal Reserve meeting begins tomorrow and it may make decisions that push mortgage rates higher. Or not. We’ll know on Wednesday afternoon.

Meanwhile, the new Omicron variant of COVID-19 may yet prove more harmful to the economy than markets currently assume. If it does, that would likely drag those rates lower.

So mortgage rates might move either way in the coming days and weeks. And your decision about when to lock your rate will probably have more to do with how comfortable you are with risk than anything else.

But, because I’m financially cautious, my personal rate lock recommendations are:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• LOCK if closing in 30 days
• LOCK if closing in 45 days
• LOCK 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 edged down to 1.44% from 1.47%. (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 lower soon after opening. (Good 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 dropped to $71.18 from $71.65 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices edged up to $1,786 from $1,781 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 — decreased to 35 from 36 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

*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 look likely to fall moderately. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

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?

Soon

Nobody knows whether mortgage rates will fall, rise or hold steady this week. Because two powerful and competing forces are likely to affect them.

One wants to push those rates higher and the other to drag them lower. And we simply can’t tell which will win.

The Fed

We should find out early on Wednesday afternoon whether the Federal Reserve will accelerate its plans for reducing its asset purchases. That sounds obscure. But it could prove critical to mortgage rates.

The Fed’s been keeping mortgage rates artificially low since March 2020 by buying mortgage-backed securities (the type of bond that largely determines mortgage rates) to the tune of $40 billion a month.

It’s already announced that it’s begun to cut that buying program. And the plan was to gradually reduce the purchases to zero by mid-2022. Now, as a result of warmer-than-expected inflation, it’s under pressure to speed up those cuts, perhaps zeroing them by March.

If it announces such a step on Wednesday afternoon, mortgage rates are likely to rise. Unless ...

Omicron

Last week, markets appeared to largely shrug off the economic dangers posed by Omicron, the new variant of COVID-19. And that insouciance may yet be proved appropriate.

But it’s far from clear that’s the case. And some believe that it poses very real threats to both health and wealth.

For example, yesterday, British Prime Minister Boris Johnson addressed his nation on TV, announcing a new and highly ambitious program of booster vaccinations. And, in justifying that and other measures, he said:

I’m afraid we’re now facing an emergency in our battle with the new variant Omicron ... At this point our scientists cannot say that Omicron is less severe. And even if that proved to be true, we already know it is so much more transmissible that a wave of Omicron through a population that was not boosted would risk a level of hospitalization that could overwhelm our NHS [National Health Service] and lead sadly to very many deaths.

— BBC News, "Covid: Boris Johnson sets new booster target over ‘Omicron tidal wave’," Dec. 12, 2021

And it’s not just Johnson who’s much more spooked by Omicron than US markets appeared to be last week. Several nations in Europe, Asia and beyond have introduced emergency restrictions that are bound to reduce economic activity.

Were American investors to come to share these heightened concerns about the new variant, mortgage rates would likely fall.

And, were Omicron to prove to be as dangerous and damaging as Johnson fears, nothing, including the Fed, would be able to stop those rates tumbling.

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. 9 report puts that weekly average for 30-year, fixed-rate mortgages at 3.10% (with 0.7 fees and points), slightly down from the previous week’s 3.11%.

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.

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.

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.