Mortgage Interest Rates Forecast

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Mortgage rates today: Thursday, December 8, 2022

On Thursday, Dec. 8, 2022, the average interest rate on a 30-year fixed-rate mortgage rose two basis points to 6.345% APR. The average rate on a 15-year fixed-rate mortgage went up 12 basis points to 5.71% APR, and the average rate on a 5-year adjustable-rate mortgage stayed roughly the same at 6.419% APR, according to rates provided to NerdWallet by Zillow. The 30-year fixed-rate mortgage is five basis points lower than one week ago and 333 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.

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Mortgage rates this week

Mortgage rates experienced considerable daily volatility in the week ending Dec. 8, eventually leveling out lower than the previous week.

  • The 30-year fixed-rate mortgage averaged 6.33% APR, down 19 basis points from the previous week's average.

  • The 15-year fixed-rate mortgage averaged 5.64% APR, down 20 basis points from the previous week's average.

  • The five-year adjustable-rate mortgage averaged 6.42% APR, down four basis points from the previous week's average.

This week's lower — and then higher, and then lower again — mortgage rates reflect the uncertainty markets face heading into next week's meeting of the Federal Reserve. Another increase to the federal funds rate is expected, but whether it will be a fifth consecutive 75-basis-point hike or the central bankers will ease up and go with 50 basis points remains up in the air.

That's because economic data that could affect the Fed's decision-making has pointed in opposite directions. The central bankers want to see that their project of raising interest rates and making it costlier to borrow money is cooling off the economy and taming inflation, with consumers and businesses reining in spending.

On the yes-it's-working side: The latest Personal Consumption Expenditures report (the Fed's favored gauge for inflation), which showed moderation in October; and lower labor costs in the third quarter, according to this week’s release from the Bureau of Labor Statistics, suggesting inflation might not be as deep-rooted as feared. The Fed perceives prices stabilizing and employers having the upper hand in the job market as good news for inflation.

On the it-might-not-be-working side: October's jobs report, which showed little change in the U.S. labor market; and November's unemployment numbers, which remained stable. Why would the Fed want higher unemployment? Well, the Federal Reserve believes an overly strong labor market contributes to entrenched inflation, because employers need to compete for workers and stronger wages allow people to absorb higher prices.

But this coming Tuesday, the first morning of the Fed's December meeting, the Bureau of Labor Statistics will release the latest Consumer Price Index. This widely watched measure of inflation could decisively sway the bankers toward staying the course at 75 basis points or backing off to 50. Until the Fed's Wednesday announcement, expect mortgage rates to continue twisting in the wind.

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