Mortgage And Refinance Rates Today, Dec. 15| Rates unpredictable

Today’s mortgage and refinance rates

Average mortgage rates just inched lower yesterday. It was such a small drop that some lenders won’t have changed their note rates and instead will have made a small adjustment to closing costs.

Mortgage rates today are essentially unpredictable. The Federal Reserve will make an announcement early this afternoon. But whether that will push those rates higher or lower is anyone’s guess. It depends on what’s said.

Find your lowest rate. Start here (Dec 16th, 2021)

Current mortgage and refinance rates

Should you lock a mortgage rate today?

The Federal Reserve is due to release a policy statement at 2 p.m. (ET) today and to follow up with a news conference 30 minutes later. Read on for reasons why nobody can be sure what these will say.

And it’s not just today that mortgage rates are unpredictable. Because where they head is largely down to how economically damaging the Omicron variant of COVID–19 turns out to be. And even the most distinguished virus experts and public health researchers are so far unclear about that.

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 yesterday, were:

• The yield on 10-year Treasury notes inched lower to 1.45% from 1.46%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mixed 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 $69.82 from $70.57 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 down to $1,766 from $1,770 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 – 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 look unpredictable. 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 16th, 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?

Today

There’s plenty going on today. Retail sales rose only modestly in November. And there have been disappointing figures from China. But those are likely to be dwarfed this afternoon.

I don’t envy members of the Federal Reserve’s monetary policy body (the Federal Open Market Committee or FOMC) who are concluding a meeting this morning. What should Fed Chair Jerome Powell say at his 2:30 p.m. (ET) news conference?

Inflation

On the one hand, inflation is putting huge pressure on those members to withdraw more quickly than planned the Fed’s pandemic–era economic support. And one element of that has been keeping mortgage rates artificially low for the last 21 months.

Last week’s consumer price index and yesterday’s producer price index showed inflation beginning to run away. So, absent other pressures, the FOMC would almost certainly announce today that it would accelerate its withdrawal of COVID–19 economic support by scheduling earlier–than–planned interest–rate hikes in 2022 and accelerating the cutting of its asset purchases, some of which directly impact mortgage rates.

If it goes ahead with those announcements, as most commentators anticipate, I’d expect mortgage rates to rise, probably today and certainly in the coming days. If it doesn’t, those rates might fall. And it might not because …

Omicron

Because, on the other hand, the Omicron variant is looming. And some FOMC members are likely to want to take its threats into account.

True, nobody can be sure how great those threats are yet. And it’s still possible that the mutated virus will prove economically beneficial rather than harmful.

But many advanced nations – especially in Europe but elsewhere, too – are already introducing new, tougher measures to counter Omicron. And those are bound to have negative economic impacts.

If the United States is forced to follow suit, the last thing the Fed wants to do is harm our economy by withdrawing its stimulus measures, just as Omicron is strangling the recovery.

What a dilemma! At least we’ll know this afternoon what’s been decided.

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.

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 16th, 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.