Mortgage Interest Rates Forecast

Jan 18, 2022

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Mortgage rates today: Tuesday, January 18, 2022

On Tuesday, Jan. 18, 2022, the average interest rate on a 30-year fixed-rate mortgage fell 14 basis points to 3.503% APR. The average rate on a 15-year fixed-rate mortgage dropped 12 basis points to 2.692% APR and the average rate on a five-year adjustable-rate mortgage declined 12 basis points to 2.911% APR, according to rates provided to NerdWallet by Zillow. The 30-year fixed-rate mortgage is three basis points higher than one week ago and 51 basis points higher than one year ago. A basis point is one one-hundredth of one percent. Rates are expressed as an annual percentage rate or APR.

NerdWallet's coronavirus resources page tracks the latest developments, including information on loan and payment relief, ways to cope and how to best manage your personal finances.

If you can't make your full mortgage payment, or you're worried that you won't be able to make the payments soon, contact your mortgage servicer immediately. You may be eligible for mortgage forbearance, temporary relief in which the lender allows you to make lower monthly payments, or no payments at all, for a specified time. NerdWallet's article about mortgage forbearance explains the basics.

A forbearance may prevent you from getting another mortgage for at least three months. Lenders are unlikely to approve you for a mortgage until you have made three on-time payments following the forbearance. During that period, you probably won't be able to get a mortgage to buy a home or to refinance.

See what types of mortgage relief programs are available to homeowners who are worried about making their house payments due to the coronavirus outbreak.

To get help, you will need to contact the mortgage servicer that collects payments. See an alphabetical list of mortgage servicers with contact information.

Here are general guidelines for what to do if you can't pay your mortgage.

Mortgage rates this week

After ticking upward in the first week of the new year, mortgage rates continued to rise the week ending Jan. 13.

  • The 30-year fixed-rate mortgage averaged 3.44% APR, up 23 basis points from the previous week's average.

  • The 15-year fixed-rate mortgage averaged 2.59% APR, up 20 basis points from the previous week's average.

  • The five-year adjustable-rate mortgage averaged 3% APR, up eight basis points from the previous week's average.

Rate increases have long been in the cards for 2022, and well, here they are. Though the Federal Reserve hasn't yet made any of its planned moves, anticipation has already sent rates upward. The prospect of rising rates is a self-fulfilling prophecy, sort of like panic-buying — stores might not be out of toilet paper, but the idea that toilet paper could run out has shoppers emptying the shelves.

If you're hoping to buy a home in 2022, could this work to your advantage? Possibly. While the tremendous gap between the number of active home seekers and the supply of homes for sale means purchases are unlikely to slow, higher rates should pump the brakes on refinance activity.

That could be good news for buyers. If folks aren't as interested in refinancing, lenders will need to look elsewhere for business. Time to get friendlier to purchase borrowers, hint hint. In December 2021, the Mortgage Bankers Association saw a slight increase in its Mortgage Credit Availability Index, which measures lenders' willingness to extend credit. Though lending standards remain considerably more strict than they were pre-pandemic, a rising rates environment may prompt lenders to loosen up. This shift could allow some buyers who've been sidelined in qualifying for a home loan to get in the game.

January mortgage rates forecast

I predict that mortgage rates will stay about the same in January. They're more likely to dip modestly than to rise.

The omicron variant of COVID-19 might exert its strongest impact on the U.S. economy and health care system in January, before easing up in February. I expect the economic effect of January's omicron wave to keep a lid on mortgage rates.

If I'm wrong, it will be because mortgage rates' recent upward trend is relentless despite workers calling in sick, airlines canceling flights and consumers paying off holiday debts rather than shopping. That last item is what we typically see every January.

What happened in December

Mortgage rates remained steady during the first three weeks of December. But the average rate on the 30-year mortgage rose 10 basis points in the last week of the year. That nudged the average rate for the month a little higher: from 3.03% in November to 3.06% in December.

This is as I predicted. At the beginning of December, I wrote that "much of December's rate increase will happen in the last week or so of the year." Allow me to pat myself on the back. I'm frequently not wrong with these monthly forecasts, but I seldom make a prediction that's this specific and then hit the bull's-eye.

Looking back at 2021

The average rate on the 30-year fixed-rate mortgage was much lower in 2021 than in 2020, which supported a sharp increase in house prices.

In 2020, the 30-year mortgage averaged 3.27% in NerdWallet's survey. The average for the whole year fell to 2.96% in 2021. Meanwhile, home prices went up unsustainably fast. The median price of an existing home jumped 13.9% in the 12 months ending in November, according to the National Association of Realtors.

When mortgage rate averages are viewed quarter by quarter, the 30-year mortgage followed an up-down-up trajectory in 2021. The undulations weren't especially harsh.

A rise in rates is undeniable, if gentle, since September. The 30-year mortgage averaged 2.89% in the third quarter of the year and 3.04% in the fourth quarter. Forecasters expect rates to keep going up in 2022, but most predict that the 30-year mortgage will remain under 4%.

Check the list
See the year’s best mortgages for first-time home buyers, refinancing, and more. Thoroughly researched by our Nerds.
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