Today’s Mortgage and Refinance Rates
Average mortgage rates edged down yesterday. Overall, they fell this week, as I predicted.
But I was lucky. And mortgage rates are inherently unpredictable at present. They depend to a large extent on data regarding the Omicron variant of COVID-19. And these are only beginning to emerge. So rates could be pushed back and forth, depending on what inferences scientists make from that data.
Find and lock in a low rate (December 5, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||3,291%||3.31%||-0.03%|
|Conventional 15 years fixed||2,528%||2,557%||-0.17%|
|Conventional 20 years fixed||3,126%||3,158%||-0.04%|
|Conventional 10 years fixed||2,618%||2.68%||-0.05%|
|30-year fixed FHA||3.307%||4,071%||-0.02%|
|15-year fixed FHA||2,585%||3.229%||-0.06%|
|5/1 ARM FHA||2,177%||3.085%||-0.01%|
|Fixed VA over 30 years||3,202%||3,397%||-0.05%|
|15-year fixed VA||3.001%||3.345%||+ 0.14%|
|5/1 ARM VA||2,559%||2,441%||-0.06%|
|Prices are provided by our network of partners and may not reflect the market. Your rate may be different. Click here for a personalized quote. See our pricing assumptions here.|
Find and lock in a low rate (December 5, 2021)
Should you lock in a mortgage rate today?
If you’re financially prudent, you may well choose to lock in your mortgage rate today. These rates don’t look bad right now. And there is a real chance that they will increase.
But, if you love to gamble – and think that the Omicron variant of COVID-19 has the potential to seriously damage the economy – you’ll probably want to continue to float your rate.
Honestly, I can’t provide better advice than this, just because neither I nor anyone else can know how damaging Omicron will be. More on that below.
Earlier in the week, I changed my personal rate foreclosure recommendations to reflect what seemed, at the time, to be a real threat from Omicron. But I could change them soon.
Yet, for now, these recommendations are as follows:
- FLOAT if closing 7 days
- FLOAT if closing 15 days
- FLOAT if closing 30 days
- FLOAT if closing 45 days
- FLOAT if closing 60 days
However, with so much uncertainty right now, your instincts could easily turn out to be as good as mine, if not better. So let your instincts and your personal risk tolerance guide you.
What changes current mortgage rates
It’s still Omicron – for now. And two possible and competing narratives seem to emerge. Compared to other variants, including Delta:
- There are warning signs that Omicron is spreading faster. But no one has died yet. And that can lead to milder symptoms and far fewer hospitalizations and deaths. If so, this could be the beginning of the end for COVID-19 as the new variant overtakes Delta and all the more dangerous ones and reduces the harm from the disease
- Omicron appears to spread faster and there is insufficient evidence to conclude that it is less harmful. Meanwhile, there are early signs that vaccines and previous infections offer less protection against it. So COVID-19 could be a lot worse this winter than last year
However, the World Health Organization (WHO) pours cold water on these two accounts. “We are going to get the answers everyone needs,” WHO Emergency Director Michael Ryan said yesterday. But this information could take weeks to emerge.
And the latest update from WHO Omicron says, “It is not yet clear whether Omicron is more transmissible … It is not yet clear whether infection with Omicron causes more severe disease compared to infections with it. other variants, including Delta.
Where Omicron has reached
So we just have to wait. Meanwhile, the Omicron variant is spreading. Yesterday it was in 38 countries. And cases had been reported in the following US states:
- New Jersey
- new York
So it is almost certain that Omicron will be in a location near you soon. But we don’t know if we should find this scary or reassuring.
What this means for mortgage rates
Reuters reported yesterday: “The International Monetary Fund is likely to lower its estimates of global economic growth due to the new Omicron variant.” But, presumably, it will only do so if the variant proves harmful enough to trigger a new wave of economically damaging measures.
Measures such as closures, school closures, increased homework, and restrictions on travel and social mix are all likely to slow or reverse the economic recovery. But we cannot yet be sure that they will be needed.
If so, mortgage rates could fall, possibly to new all-time lows. If they are not, the recovery should continue and the upward pressure on these rates will be free. These include continued hot inflation. And higher interest rates on all types of loans sooner than expected.
Economic reports next week
Yesterday took place the publication of the monthly report on the employment situation. Many currently see this as the most important economic report of all. And yet the markets barely reacted to it.
The overall figure (the number of jobs added to the non-farm payroll) was much lower than expected. And you’d normally expect mortgage rates to drop significantly on this news.
There are two possible explanations why they didn’t. First, many of the other numbers in the report were pretty good. Or, second, investors are too focused on the possible effects of the Omicron variant to pay much attention to historical data, no matter how small.
If so, next week’s reports might receive just as little attention. But, if it is the former, we can see some reaction to the larger ones, which cover inflation and employment.
The main ones below are in bold. But none of the other economic reports listed below are likely to cause much movement in the markets unless they include some incredibly good or bad data:
- Tuesday – Third Quarter Productivity and Unit Labor Costs (Revisions)
- Wednesday – October Jobs and job quits
- Thursday – Weekly new unemployment insurance claims to December 4
- Friday – November consumer price index and core inflation. Plus the first reading of the December Consumer Confidence Index and “inflation expected over the next five years“
Wednesday and Friday can be key days, if applicable.
Find and lock in a low rate (December 5, 2021)
Mortgage interest rate forecasts for next week
Mortgage rates are unpredictable next week. Sorry for the evasion. But quite simply they are.
Mortgage and refinancing rates generally move in tandem. And a gap that had grown between the two was largely eliminated by removing unfavorable refinancing fees from the market.
Meanwhile, another recent regulatory change has likely made mortgages for investment property and vacation homes more accessible and less expensive.
How your mortgage interest rate is determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.
And it depends heavily on the economy. So mortgage rates tend to be high when things are going well and low when the economy is struggling.
But there are five ways you play an important role in determining your own mortgage rate. And you can significantly affect it by:
- Find Your Best Mortgage Rate – They Vary Dramatically From Lender to Lender
- Increase Your Credit Score – Even a Small Bump Can Make a Big Difference in Your Rate and Payments
- Save the Biggest Down Payment Possible – Lenders love you to have real skin in this game
- Keep your other loans small – The lower your other monthly commitments, the larger the mortgage you can afford
- Choosing Your Mortgage Carefully – Are you better off with a conventional, FHA, VA, USDA, jumbo, or whatever loan?
Time spent lining up these ducks can earn you lower rates.
Remember, it’s not just a mortgage rate
Make sure you factor in all of your future homeownership costs when determining how much mortgage you can afford. So focus on your “PITI”. It’s your Pmain (reimburses the amount you borrowed), Iinterest (the loan price), (property) Taxes, and (owners) Iassurance. Our mortgage calculator can help.
Depending on the type of mortgage you have and the amount of your down payment, you may also need to pay for mortgage default insurance. And that can easily reach three digits each month.
But there are other potential costs. You will therefore have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repair and maintenance costs. There is no owner to call in case of a problem!
Finally, you will have a hard time forgetting the closing costs. You can see which are reflected in the Annual Percentage Rate (APR) that will be shown to you. Because it effectively spreads them out over the life of your loan, making it higher than your normal mortgage rate.
But you may be able to get help with those closing costs. and your down payment, especially if you are a first-time buyer. Read:
Down payment assistance programs in each state for 2021
Mortgage rate methodology
Mortgage Reports receive daily rates based on selected criteria from multiple lending partners. We arrive at an average rate and an APR for each type of loan to display in our graph. Because we average a range of rates, it gives you a better idea of ââwhat you might find in the market. In addition, we average the rates for the same types of loans. For example, fixed FHA with fixed FHA. The result is a good overview of daily rates and how they have changed over time.