Mortgage rates today, Dec. 23, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates edged higher yesterday and across the last seven days. But the movement has been tiny. And almost all of the significant falls we saw on Dec. 13 and 14 remain intact.

Mortgage rates could continue to barely move next week. There’s nothing on the calendar that’s likely to trigger much movement.

However, sometimes the holiday brings volatility in markets, just because fewer traders at their desks mean fewer trades. And that can magnify what would normally be small movements in prices, yields and mortgage rates. So, nothing’s guaranteed.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

I remain optimistic that mortgage rates are set on a gentle downward trend. Of course, countless things could come along to prove me wrong. But, with luck, that new trend could last several months.

So, my personal rate lock recommendations are now:

• LOCK 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

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

What’s moving current mortgage rates

This week

It’s been an eerily quiet week for mortgage rates, despite a couple of major economic reports that could have moved them. Most importantly, the corrective bounce I feared didn’t materialize. One of those occurs when investors pause after a sharp movement in markets and decide they have gone too far. And they’re quite common.

It’s not impossible that one will still come along. But every day that passes makes one less likely.

Next week

There’s every reason to hope that next week will be as quiet for mortgage rates as this one has been. Not only will it be short, with markets closed on Christmas day and closing early on Dec. 29, but there’s nothing on the calendar that typically moves those rates far or for long.

Indeed, most of next week’s economic reports usually go unnoticed by the market that largely determines mortgage rates. Occasionally, a consumer confidence report (Tuesday) can have an effect as can the weekly jobless figures (Thursday). But, mostly, markets shrug them off.

Economic reports next week

See above for details about the more important economic reports next week.

In the following list of next week’s reports, only those in bold typically have the potential to affect mortgage rates appreciably. The others probably won’t have much impact unless they contain shockingly good or bad data.

• Monday — Markets closed
• Tuesday — December consumer confidence index. And October S&P Case-Shiller home price index (20 cities)
• Wednesday — Nothing
• Thursday — November pending home sales. Plus initial claims for jobless benefits for the week ending Dec. 23
• Friday — December Chicago business barometer. Bond markets close early

I’m hoping and expecting that no reports next week will affect mortgage rates much.

Time to make a move? Let us find the right mortgage for you

Mortgage rates forecast for next week

Mortgage rates next week might barely move. There may be some volatility owing to changed trading conditions over the holiday. But I hope not.

Either way, we at The Mortgage Reports wish you and your loved ones a very happy holiday.

How your mortgage interest rate is determined

A bond market generally determines mortgage and refinance rates. It’s the one where trading in mortgage-backed securities takes place.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble. But inflation rates can undermine those tendencies.

Your part

But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:

1. Shopping around for your best mortgage rate — They vary widely from lender to lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
5. Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, they’re not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So, focus on something called you “PITI.” That stands for:

• Principal — Pays down the amount you borrowed
• Interest — The price of borrowing
• Taxes — Specifically property taxes
• Insurance — Specifically homeowners insurance

Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So, you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that rate higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2023

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 result is a good snapshot of daily rates and how they change over time.