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December 2021 Mortgage Rates

December 2021 mortgage rates have the potential to improve (compared to November’s mortgage rates) after the bond market rallied during the last week of November. And when it comes to mortgage rates it’s important to remember this industry saying; mortgage rates take the elevator up and they take the stairs down.

This means that mortgage rates move higher quickly and move lower slowly. So having realistic expectations about December 2021 mortgage rates is important.

Second, it’s a rare occurrence to see mortgage rates improve between the Christmas – New Year holidays, even if the bond market dramatically improves. The biggest reason is that lenders will be short-staffed as employees take vacation time and because of that they want to avoid an avalanche of new loan applications so generally speaking mortgage rates tend to stay a bit elevated during this period.

The first week of January lenders will evaluate the market, and future expectations to determine how aggressive they want to be with mortgage rates.

FHA Mortgage Rates

Jumbo Mortgage Rates

Opportunities And Risks For December 2021 Mortgage Rates

The opportunity for December 2021 mortgage rates to improve is a bit bigger than it was in November. That being said, do not expect to see significant improvements.

The main market driver for the foreseeable future is inflation. If inflation goes up more than expected you will probably see December 2021 mortgage rates move higher.

If inflation is flat to lower than expected December 2021 mortgage rates should remain stable and possibly improve from late November levels.

And when it comes to locking in a mortgage rate, being realistic is so important. Expecting rates to drop a .50% from current levels is unrealistic and I’m 99.99% sure that will not happen.

December 2021 Mortgage Rate Forecast For California

Here are our latest December 2021 mortgage rate forecasts for California:

  • 30-year fixed rates below 2.875%
  • 20-year fixed rates below 2.75%
  • 15-year fixed rates below 2.25%

Our December 2021 mortgage rate forecast is based on properties in California, a loan amount of $350,000, a primary home, excellent credit (740 or higher credit score), and a Loan-To-Value ratio below 60% (purchase transactions).

We may see days in which mortgage rates spike higher however overall we believe there will be opportunities to lock a mortgage rate at or below these levels throughout the month of December.

First Time Home Buyer In New Home

California VA Home Loan

Are you a veteran looking to refinance a current mortgage or purchase a new home in California? We offer a great California VA Home Loan program that includes the VA streamline refinance loan program.

Mortgage Rate And Payment Chart

Here is a quick reference guide to December 2021 mortgage rate possibilities in California (these are not quotes; just examples) and the payments associated with each level based on various conforming loan amounts. See our important disclosure below.

30-Year Fixed-Rate Mortgage:

TermLoan AmountMortgage RatePayment
30-year fixed$262,0002.75%$1,069.59
30-year fixed$362,0002.75%$1,477.83
30-year fixed$462,0002.75%$1,886.07
30-year fixed$562,0002.75%$2,249.32

20-Year Fixed-Rate Mortgage:

TermLoan AmountMortgage RatePayment
20-year fixed$262,0002.625%$1,404.36
20-year fixed$362,0002.625%$1,940.37
20-year fixed$462,0002.625%$2,476.38
20-year fixed$562,0002.625%$3,012.40

15-Year Fixed-Rate Mortgage:

TermLoan AmountMortgage RatePayment
15-year fixed$262,0002.00%$1,685.99
15-year fixed$362,0002.00%$2,329.50
15-year fixed$462,0002.00%$2,973.01
15-year fixed$562,0002.00%$3,616.52

Important Disclosure For December 2021 mortgage rates: The above is not a mortgage rate quote; nor is it an offer to lend. It’s only a generic example of various mortgage rates, loan amounts, and payments. Our mortgage rate chart is meant to educate and inform our readers. The current December 2021 mortgage rate market may be higher or lower than the examples listed in these mortgage rate charts. Also; mortgage rates can and often do adjust multiple times a day. 

California Mortgage Calculator

Using a mortgage calculator to figure out your monthly payment is an essential part of buying a home in California or refinancing a current mortgage. Use our free mortgage calculator to help you determine what you can afford.

With our online mortgage calculator, you can also factor in your property tax amount along with your annual homeowner’s insurance amount with your monthly mortgage payment.

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And our mortgage calculator is especially helpful for those who want to impound their property taxes and property insurance into their monthly mortgage payment. If you have any questions about or California mortgage calculator please don’t hesitate to ask.

2022 Conforming Loan Limits

Here is some good news for homeowners and homebuyers. The Federal Housing Finance Agency (FHFA) recently announced that the baseline 2022 Conforming Loan Limit for California is $647,200. More details to follow later in the month on our Conforming loan limits page.

Update Mortgage Guidelines December 2021

There is nothing significant in terms of new mortgage guidelines as we enter the month of December.

Economic Calendar For December 2021

Here we cover the daily economic events that might impact mortgage rates. After the report comes out we’ll update the post with that information and comment on if there is a potential impact on the Mortgage-Backed Securities market and consumer mortgage rates.

To start things off we have:

Thursday – December 30th:

  • Unemployment Claims: This week’s Unemployment Claims report came in at 198,000 and continuing claims came in at 1,716,000.
  • Chicago PMI: The Chicago PMI report came in at 63.1 which is higher than last months report (61.8).

Thursday – December 23rd:

  • Unemployment Claims: This week’s Unemployment Claims report came in at 205,000 and continuing claims came in at 1,859,000.
  • Durable Goods: The Durable Goods report was stronger than expected; 2.5% vs 1.6%.

Wednesday – December 22nd:

  • MBA Purchase Index: The MBA Purchase Index came in at 287.5.
  • MBA Refinance Index: The MBA Refinance Index came in at 2402.7.

Thursday – December 16th:

  • Unemployment Claims: This week’s Unemployment Claims report came in at 206,000 and continuing claims came in at 1,845,000.
  • Markit Composite PMI: The Markit Composite PMI came in at 56.9 which is higher than last month’s reading of 57.2. December 2021 mortgage rates remained stable post report.

Wednesday – December 15th:

  • MBA Purchase Index: The MBA Purchase Index came in at 297.2.
  • MBA Refinance Index: The MBA Refinance Index came in at 2350.5.

Tuesday – December 14th:

  • Producer Prices Index: The Producer Prices index increased more than expectations; 0.8% vs 0.5%. December 2021 mortgage rates were not impacted by the report.

Thursday – December 9th:

  • Unemployment Claims: This week’s Unemployment Claims report came in at 206,000 and continuing claims came in at 1,845,000.

Wednesday – December 8th:

  • MBA Purchase Index: The MBA Purchase Index came in at 295.2.
  • MBA Refinance Index: The MBA Refinance Index came in at 2511.5.

Friday – December 3rd:

  • Employment Report: Market expectations are for 550,000 jobs created. The report showed job growth at 210,000; average earnings increasing 0.3% and the average workweek hours came in at 34.8. December 2021 mortgage rates were flat post report.

Thursday – December 2nd:

  • Unemployment Claims: This week’s Unemployment Claims report came in at 222,000 and continuing claims came in at 1,956,000.

Wednesday – December 1st:

  • MBA Purchase Index: The MBA Purchase Index came in at 310.7.
  • MBA Refinance Index: The MBA Refinance Index came in at 2304.5.
  • ADP National Employment Report: The market anticipated the ADP Employment Report to come in at 525,000 jobs created however the report showed 534,000 jobs created.
  • ISM Manufacturing PMI: The market was expecting the ISM Manufacturing PMI report to come in at 61.0 however the report came in at 61.1.

December 2021 Mortgage Rates In California – Average

We’ll update this section as we move further into December however to start off the month we’re seeing the following averages.

  • The average 30-year fixed mortgage rate is 2.75%.
  • The average 20-year fixed mortgage rate is 2.25%
  • The average 15-year fixed rate is 2.00%.

This is an average of the December 2021 mortgage rates of everyone we’re seeing; from less than perfect credit to excellent credit. Please keep in mind that mortgage rates adjust daily; sometimes multiple times during the day. For a mortgage quote specific to your situation please be sure to contact us directly.

Mortgage-Backed Securities & Treasury Snapshot

December 27th – December 31st:

Mortgage-Backed Security UMBS 2.0 started trading at the 99.69 level and the UMBS 2.5 coupon started at the 102.06 level. The 10y Treasury yield was at the 1.47% level.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 99.69 level and the UMBS 2.5 coupon was nearing the 102.47 level. The 10y Treasury yield was at 1.51% level.

December 20th – December 24th:

Mortgage-Backed Security UMBS 2.0 started trading at the 99.80 level and the UMBS 2.5 coupon started at the 102.17 level. The 10y Treasury yield was at the 1.42% level.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 99.56 level and the UMBS 2.5 coupon was nearing the 101.98 level. The 10y Treasury yield was at the 1.49% level.

December 13th – December 17th:

Mortgage-Backed Security UMBS 2.0 started trading at the 99.84 level and the UMBS 2.5 coupon started at the 102.17 level. The 10y Treasury yield was at the 1.40% level.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 99.83 level and the UMBS 2.5 coupon was nearing the (pending) level. The 10y Treasury yield was at the 1.40% level.

December 1st – December 10th:

Mortgage-Backed Security UMBS 2.0 started trading at the 99.83 level and the UMBS 2.5 coupon started at the 102.25 level. The 10y Treasury yield was at the 1.472% level.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the (pending) level and the UMBS 2.5 coupon was nearing the 102.17 level. The 10y Treasury yield was at the 1.43% level.

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For additional daily mortgage updates, you can also follow me on Twitter Loan Officer Kevin O’Connor and on Facebook Loan Officer Kevin O’Connor.

Loan Officer Kevin O'Connor

About The Author

Loan Officer Kevin O'Connor has over 17+ years of experience as a Mortgage Loan Originator and is licensed by the state of California and the Nationwide Mortgage Licensing System. He has a top rating with the Better Business Bureau, Google, Yelp, and Zillow. CA DRE #01499872 / NMLS #247447

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