Mortgage Rates Today, Tuesday, December 16: Fairly Flat

Today saw relatively stable mortgage rates, with the release of key federal data that could influence future trends.

The average APR for a 30-year fixed-rate mortgage dipped to 6.17%, as reported by Zillow to BW. While this is two basis points lower than yesterday, it is six basis points higher than a week ago. (Refer to the chart below for more details.) A basis point represents one one-hundredth of a percentage point.

Despite the recent 25 basis point cut in short-term borrowing rates by the Federal Reserve, mortgage rates did not drop further. It’s important to note that the Fed’s actions do not directly determine mortgage rates. Mortgage rates experienced more significant changes leading up to the Fed’s September meeting when the federal funds rate was cut. Since then, mortgage rates have fluctuated within a narrow range.

This week’s data releases could impact mortgage rates in the coming days. More information on this is available below the graph.

Mortgage rates are constantly changing, influenced by various factors such as inflation reports, job numbers, Fed meetings, and global events. Even small fluctuations in the bond market can impact mortgage rates.

This week, attention is on the Bureau of Labor Statistics data, which will offer insights into the state of the U.S. economy. These reports are particularly significant given previous delays and cancellations during the government shutdown.

The release of the Employment Situation Summary, also known as the jobs report, revealed slightly better-than-expected job growth in November. However, the unemployment rate exceeded expectations, indicating potential economic challenges.

While job growth is a positive sign, the rising unemployment rate suggests economic weakness. This could prompt a further rate cut by the Fed in January, leading to a possible decrease in mortgage rates.

Upcoming data releases, such as November’s Consumer Price Index on Thursday, will provide valuable insights into inflation trends. High inflation rates could push mortgage rates up, as the Fed may increase rates to manage inflation.

Data-driven decisions by the Fed will be crucial in determining future rate changes. The outlook for the Federal Reserve’s upcoming meeting in January remains uncertain, with market opinions divided on potential rate cuts or maintenance of current rates.

Factors such as inflation and unemployment levels will play a significant role in the Fed’s decision-making process. The release of December’s data before the next Fed meeting will provide more clarity. Depending on the Fed’s stance, mortgage rates may decrease with a rate cut in January or increase if rates are maintained or raised.

Refinancing may be beneficial if current rates are significantly lower than your existing rate, considering factors like closing costs and how long you plan to stay in your home.

Given the current rate environment, it may be worth considering a refinance if your current rate is at or above 6.69%.

When deciding on refinancing, it’s essential to align your goals, whether it’s reducing monthly payments, shortening the loan term, or tapping into home equity. Different types of refinancing options cater to various financial objectives.

Utilize BW’s refinance calculator to estimate potential savings and determine the breakeven point for refinancing costs.

Ensuring that you can comfortably manage a mortgage at current rates is more crucial than timing the market for the lowest rates. If affordability is not an issue, focus on getting preapproved, comparing offers, and aligning monthly payments with your budget.

BW’s affordability calculator can assist in estimating potential monthly payments and planning for future homeownership goals.

If you have received a rate quote that meets your requirements, consider locking in your mortgage rate, especially if your lender offers a float-down option. This feature allows you to take advantage of lower rates if they become available during the lock period.

Rate locks provide protection against rate increases during the loan processing period, offering peace of mind amid market fluctuations.

Online advertised rates are typically sample rates for borrowers with excellent credit, significant down payments, and payment for mortgage points, which may not align with every individual’s circumstances.

In addition to external market factors, personalized rate quotes are influenced by individual factors such as location, property type, credit score, and financial profile.

While you may get a rate similar to what you saw today, mortgage rates can change until you lock in a rate. Lenders adjust pricing multiple times a day in response to market fluctuations.