Mortgage rates today, December 11, and rate forecasts for next week
Today’s Mortgage and Refinance Rates
Average mortgage rates fell yesterday. But only by the smallest measurable amount. And, according to the Mortgage News Daily archives, the conventional 30-year fixed-rate mortgages closed on Friday exactly where they were the previous Friday.
Sadly, mortgage rates remain fundamentally unpredictable. Next Wednesday, a key two-day Federal Reserve meeting will report on some crucial decisions for these rates. And, of course, medical data regarding the Omicron variant of COVID-19 could emerge, and it too could have an impact. More information on both, below.
Find and lock in a low rate (December 12, 2021)
Current mortgage and refinancing rates
|Conventional 30 years fixed||3,302%||3.322%||Unchanged|
|Conventional 15 years fixed||2,525%||2,558%||Unchanged|
|Conventional 20 years fixed||3,154%||3,194%||Unchanged|
|Conventional 10 years fixed||2,617%||2.683%||-0.01%|
|30-year fixed FHA||3,289%||4,054%||-0.01%|
|15-year fixed FHA||2,596%||3,242%||Unchanged|
|5/1 ARM FHA||2,295%||3,175%||Unchanged|
|Fixed VA over 30 years||3.223%||3,421%||Unchanged|
|15-year fixed VA||2,877%||3.225%||+ 0.02%|
|5/1 ARM VA||2.507%||2,539%||-0.01%|
|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 12, 2021)
Should you lock in a mortgage rate today?
Really, I can offer very little reliable advice on when to lock in your rate. Because we’re waiting for two things that could push mortgage rates back and forth. Read the section “What’s Changing Mortgage Rates?” (Below) for more details.
This means that your decision depends primarily on your personal tolerance for risk. If you’re financially prudent, lock in your rate soon. If you’re happy to bet on the lower rates, just keep floating.
Being the cautious type, I changed my personal rate foreclosure recommendations earlier this week. And they are now:
- LOCK if closing seven days
- LOCK if closing 15 days
- LOCK if closing 30 days
- LOCK if closing 45 days
- LOCK if closing 60 days
However, with so many uncertainties 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
The Federal Reserve
The Federal Open Market Committee (FOMC) begins a two-day meeting next Tuesday (December 14) and will hold a press conference early Wednesday afternoon.
The FOMC is the Fed’s monetary policy arm and its statements are extremely important to markets in general, including the one in which Mortgage Backed Securities (MBS) are traded. And the MBS largely determine mortgage rates.
As of March 2020, the Fed has been buying MBS at a rate of $ 40 billion per month. And that has kept mortgage rates artificially low.
But, as inflation became a problem, the Fed announced that it would gradually reduce these purchases, starting last month. In a process called “tapering,” he planned to reduce his monthly purchases to zero by mid-2020.
But yesterday’s Consumer Price Index showed prices were rising at their fastest pace since 1982. And that puts pressure on the Fed to announce next Wednesday that it will cut back its purchases of MBS more quickly, maybe to end it in March or April. It could also signal on that day that it will raise its own interest rates sooner than expected.
Of course, we don’t know what the Fed will say on Wednesday. But, if he announces either of these measures, it will likely drive up mortgage rates.
Markets seem to have put aside their concerns about the Omicron variant, at least for now. But that doesn’t mean this chapter is closed.
Certainly, the first signs suggest that the new variant may tend to have less harmful effects on the health of most patients than the previous ones. But, if it is spreading as quickly as it seems likely, it may not matter much from a hospitalization and death rate perspective. Because a small proportion of a huge number can be a very large raw number.
The UK is only a few days ahead of us in terms of infections. And, on Wednesday, Britain’s Health Secretary told parliament the country was bracing for 1 million Omicron infections by the end of this month, according to The Guardian. Allowing for population differences and assuming a similar spread of the disease, that could mean 5 million cases of Omicron here in early January.
If only a small proportion of these cases prove to be severe enough to require hospitalization, it could still be enough to overwhelm health care resources.
The good news is that booster shots appear to offer real protection against serious Omicron health issues. Corn less than 50 million Americans received their boosters. So we have a long way to go to avoid the new variant.
Meanwhile, none of the data we have received so far is completely reliable, as it is all based on small samples. And, if Omicron turns out to have more serious economic implications than the markets currently assume, then mortgage rates should come down.
What this means for mortgage rates
So just like last week, we’ll just have to wait and see. Will the Fed Raise Mortgage Rates? Or will Omicron drag them lower? Nobody knows.
But we might be faced with some volatility as the fight between the two continues.
Economic reports next week
Wednesday’s FOMC meeting could prove to have the biggest impact on mortgage rates next week. But some economic reports could also change these rates.
The main ones below are in bold. And, of these, retail sales are the most likely to affect mortgage rates.
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 – November producer price index
- Wednesday – November retail sales and import price index
- Thursday – November Building permits and starts. And the November industrial production index and capacity utilization. More weekly new unemployment insurance claims to December 11
Show me today’s rates (December 12, 2021)
Mortgage interest rate forecasts for next week
Mortgage rates could go either way next week – or remains roughly stable. Unfortunately, no one can predict what the Fed might say or what might happen to Omicron.
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 the Right Mortgage – Are you better off with a conventional, FHA, VA, USDA, jumbo or other 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 what 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.
The information on The Mortgage Reports website is provided for informational purposes only and does not constitute an advertisement for any products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, its parent company or its affiliates.