Mortgage and refinance rates today, Dec. 17, 2021

Today’s mortgage and refinance rates

Average mortgage rates edged a little lower yesterday. Since the start of this month, in spite of their ups and downs, they’ve actually moved very little.

So far this morning, it’s looking as if mortgage rates today might fall again. But nothing’s certain at the moment.

Find your lowest rate. Start here (Dec 18th, 2021)

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Yesterday, I wrote here: ” … the impact [on mortgage rates] of the Fed’s announcement may be short–lived. That depends on the effects the Omicron variant has on the American economy.”

And, sure enough, CNBC reported overnight, “U.S. Treasury yields inched lower on Friday morning, as investors remained cautious over the spread of the omicron variant.” There’s usually a close relationship between 10–year Treasury yields and mortgage rates.

If investors’ wariness of the new COVID–19 variant’s economic threats grows, we might see yet lower mortgage rates.

But, because I’m financially cautious, my personal rate lock recommendations 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 fell to 1.38% from 1.43%. (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 $71.35 a barrel. (Neutral for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices increased to $1,808 from $1,791 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 – Was unavailable at the time of publication

*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 might fall moderately. 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 18th, 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. 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?

For now, mortgage and refinance rates are barely moving. Absent other factors, they should be rising. But other factors are not absent.

Federal Reserve

On Wednesday, the Federal Reserve announced policy changes that should have put upward pressure on mortgage rates. It said it would:

1. Double the pace at which it pares back (“tapers”) its support for artificially low mortgage rates. It’s been buying mortgage–backed securities (the type of bond that largely determines mortgage rates) at a rate of $40 billion a month. It had planned to cut that by $5 billion a month. Now it’s cutting it by $10 billion a month
2. Probably hike its own its own rates three (possibly four) times during 2022

Normally, that should have been enough to set mortgage rates on a firm upward trajectory.

Omicron

But the Fed’s actions haven’t had that effect. According to Mortgage News Daily’s archive, rates on a conventional 30–year, fixed–rate mortgage edged up by only 2 basis points (a basis point is one–hundredth of 1%) in response to Wednesday’s announcement. And then edged down by the same 2 basis points yesterday.

It’s too soon to assess how big an economic threat Omicron poses. Scientists are still scrambling to understand its characteristics. And every day we see headlines bringing bad or good news from small–scale studies that are inconclusive.

But clearly markets are eyeing the mutated virus with caution. For more on Omicron, read yesterday’s edition of this daily report.

If Omicron spreads in America in the way it currently is in Europe, and if it turns out to be as dangerous as some fear, we could see mortgage rates tumble here. But, at this point, you probably shouldn’t bank on that.

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. 16 report puts that weekly average for 30–year, fixed–rate mortgages at 3.12% (with 0.6 fees and points), slightly up from the previous week’s 3.10%.

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.

Forecaster	Q4/21	Q1/22	Q2/22	Q3/22
Fannie 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, 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.

Show me today’s rates (Dec 18th, 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.