Mortgage and refinance rates today, Dec. 2, 2022

Today’s mortgage and refinance rates

Average mortgage rates fell sharply yesterday. I’d suggested that a further fall was a possibility, but was surprised by its size. You now have to go back to September to find lower rates.

So far this morning, mortgage rates today look likely to rise. That followed stronger-than-expected employment data this morning. However, as always, those rates might switch direction as the hours pass.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Don't lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.

I’m still unconvinced that recent falls in mortgage rates will last long. And I still think a return to somewhere in the 7% range is the most likely scenario for late 2022 and early 2023. However, I can’t ignore what’s currently happening in markets and must admit to a lower level of confidence in my predictions.

Still, my personal rate lock recommendations for the longer term must for now remain:

• 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 yesterday, were:

• The yield on 10-year Treasury notes tumbled to 3.60% from 3.78%. (Good for mortgage rates.) However, those yields were rising this morning. More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
• Major stock indexes were lower soon after opening. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
• Oil prices fell to $81.71 from $82.90 a barrel. (Good for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
• Gold prices decreased to $1,796 from $1,812 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold rises and worse when gold falls. Gold tends to rise when investors worry about the economy.
• CNN Business Fear & Greed index — dropped to 63 from 71 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 movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.

Yes, there are lots of “good for mortgage rates” in that list. But most of those benefits arrived yesterday. And, this morning, yields on mortgage bonds were rising, meaning mortgage rates are likely to, too.

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 rise. However, be aware that “intraday swings” (when rates change speed or 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 broader 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 will happen to mortgage rates in the coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

You’ll remember that mortgage rates began to slide following a speech on Wednesday afternoon by Federal Reserve Chair Jerome Powell. That surprised me for reasons I laid out yesterday. Thursday’s positive inflation data added momentum to that tumble and resulted in a truly significant fall.

Markets believe that the good news contained in both the most recent and important inflation reports will allow the Fed to back off from its aggressive program of rate hikes. And investors think the central bank might “pivot” (change direction and begin to cut rates) much earlier than expected.

Those assumptions are arguably the main reason mortgage rates have fallen so far recently. Investors have been betting big on a very early pivot. The trouble is, the Fed keeps warning investors that rate hikes will continue for several months — though maybe at a slower pace — and any pivot is a long way off. As Nicole Goodkind wrote for CNN Business yesterday:

My mother told me to hope for the best but expect the worst. When it comes to a Fed pivot, that’s a lesson investors still need to learn.

— CNN Business, Before the Bell e-newsletter, Dec. 1, 2022

I’ve been waiting for markets to learn this lesson, which is why I’ve been pessimistic about future mortgage rates. But they seem to be slow learners. If they eventually twig, I might be proved right. But, if they continue to pretend not to hear the Fed’s clear signals, those rates might remain low.

Today’s jobs report

This morning’s employment situation report is highly relevant to this pivot issue. Both the Fed and markets were hoping the data would show a higher unemployment rate and a slowing in wage growth.

That’s because the Fed has signaled that it will view deteriorating employment data as a sign that its rate hikes are beginning to tame inflation. And the sooner inflation is reined in, the sooner that pivot will arrive — though almost certainly not as quickly as some investors seem to think.

In the event, this morning’s employment figures showed a resilient labor market, something neither the Fed nor markets will like. The number of new jobs in November was 263,000, compared to a consensus forecast of 200,000. And the unemployment rate was unchanged.

For more background, please read the weekend edition of this report.

Recent trends — updated today

According to Freddie Mac’s archives, the weekly all-time low for mortgage rates was set on Jan. 7, 2021, when it stood at 2.65% for conventional, 30-year, fixed-rate mortgages.

Freddie’s Dec. 1 report put that same weekly average at 6.49%, down from the previous week’s 6.58%.

Recently, Freddie stopped including discount points in its forecasts. It has also moved later in the day the time at which it publishes its Thursday reports. And, from now on, we'll be updating this section on Fridays.

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 rate forecasts for the current quarter (Q4/22) and the first three quarters of next year (Q1/23, Q2/23 and Q3/24).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s forecast appeared on Nov. 22, the MBA’s on Nov. 23 and Freddie’s on Oct. 21. Freddie now publishes its forecasts quarterly and its figures can quickly become stale.

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.

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.”

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.