California mortgage rates January 2021 – refinance and purchase transactions. Opportunities for lower mortgage rates in January 2021 really depend on the three things;

Will the Democrats take control of the Senate?
Will vaccinations ramp up in January?
Will the economy reverse course and gain traction?

If the answer to these questions is “no” there’s a decent chance mortgage rates will improve in January (not a certainty). How does the Georgia Senate election impact consumer mortgage rates? If the Democrats take control of the Senate there is a great chance that additional stimulus legislation for the economy will pass. More stimulus means the government will have to issue more bonds. And when there is an increased supply of government bonds usually mortgage rates are at risk of moving higher.

Vaccinations and the economy are somewhat tied together. A failure on these two is good for mortgage rates and bad for the economy. Generally speaking, more vaccinations will result in more consumer spending, and more consumer spending will result in an improving economy. So the risks to mortgage rates are significant if Democrats win the Senate, vaccinations increase and the economy reverses course.

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.

Our California mortgage calculator is free and easy to use.

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.

January 2021 Mortgage Rate Forecast For California

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

30-year fixed rates below 2.75%
20-year fixed rates below 2.625%
15-year fixed rates below 2.375%

This is based on properties in California, a loan amount of $325,000, 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 January.

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB)is a government organization that regulates the offerings of lending institutions and helps protect consumers from fraud. President-Elect Biden recently announced that Rohit Chopra will head the CFPB under his administration.

Mr. Chopra was previously the Assistant Director of the CFPB and a former commissioner of the FTC.

2021 Conforming Loan Amount California

On November 24th, 2020 the Federal Housing Finance Agency (FHFA) announced updated California Conforming loan limits for all 58 counties in California. The baseline limit increased to $548,250 and the jumbo-conforming loan limit increased to $822,375 (this is for “high cost” counties such as Alameda County and Los Angeles County).

The FHFA oversees Fannie Mae and Freddie Mac which means the 2021 conforming loan amount in California was raised for both agencies. This is a sizable increase from the 2020 limit of $510,400 baseline and in some high-cost counties, it was $765,600.

January 2021 Mortgage Rate Chart

Here is a quick reference guide to January 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:

Term	Loan Amount	Mortgage Rate	Payment
30-year fixed	$235,000	2.50%	$928.53
30-year fixed	$335,000	2.50%	$1,318.35
30-year fixed	$435,000	2.50%	$1,718.78
30-year fixed	$535,000	2.50%	$2,113.90

20-Year Fixed Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
20-year fixed	$235,000	2.375%	$1,231.01
20-year fixed	$335,000	2.375%	$1,754.85
20-year fixed	$435,000	2.375%	$2,278.68
20-year fixed	$535,000	2.375%	$2,802.51

15-Year Fixed Rate Mortgage:

Term	Loan Amount	Mortgage Rate	Payment
15-year fixed	$235,000	2.00%	$1,512.25
15-year fixed	$335,000	2.00%	$2,155.75
15-year fixed	$435,000	2.00%	$2,799.26
15-year fixed	$535,000	2.00%	$3,442.77

Important Disclosure For January 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 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.

Mortgage Rates And The Inauguration

Will the inauguration of President-Elect Biden impact mortgage rates?

Probably not since the market has anticipated this since late November/early December when it became clear there wasn’t any massive voter fraud.

However if for some strange reason there is a last-minute disruption to that and his inauguration is delayed or if it does not happen then that could be a significant market event and if so mortgage rates might be impacted. Usually, uncertainty results in bond buying which can lead to mortgage rates moving lower however that’s not always the case.

Anticipating a disruption and hoping that results in lower mortgage rates would be unwise and super risky.

January 2021 Mortgage Rate FAQ’s

Here we answer some popular questions about mortgage rates in California.

Which Is Better, A 30 Year or a 15 Year Fixed Rate Mortgage:

The simple answer is this; it depends.

Everyone’s financial situation and long-term financial goals are different. There isn’t a single mortgage loan that is the best fit for everyone buying a home or refinancing a mortgage.

Knowing that is important and critical to determining which loan program is best for you. A 30 year or a 15 year fixed rate mortgage depends on what goals you want to achieve and how you want to spend your income.

If your goal is to have more disposable income on a monthly basis then a 30 year fixed might be the best mortgage for you. If your not too concerned about having more available income to spend/save and are focused on paying off your mortgage then a 15 year fixed rate mortgage might be the best mortgage for you.

What Are Impounds?

When it comes to mortgage impounds refer to the borrower adding the property tax and property insurance amounts with their monthly mortgage payment. Then when those bills are due the mortgage lender pays those bills. It’s a great way to break up those expenses into twelve monthly payments.

Does A Co-Borrower Have To Live In The Home?

No. We offer mortgage programs that allow for a Co-Borrower to leave somewhere other than the subject property (when you are buying or refinancing a primary residence).

Will The Senate Race In Georgia Have An Impact On Mortgage Rates?

Most likely yes.

If the Democrats win both Senate seats that could be bad for bonds, at least in the short term and there is a simple reason for this. It’s well known that if the Democrats take control of the Senate they’ll move forward with $2,000 stimulus checks. Why is this “bad” for mortgage rates? The reason this may cause mortgage rates to move higher is that the treasury will have to issue more bonds to pay for the stimulus checks and more bond supply for the government takes investors away from the Mortgage Backed Securities market which is where mortgage rates originate.

All that being said it may not be that bad (in terms of the move higher). Lenders are operating on healthy margins right now and if the selloff in the bond market is somewhat contained then overall mortgage rates should remain low.

Update Mortgage Guidelines January 2021

Second mortgages are coming back and we’re offering our clients this option. If you are refinancing a 1st mortgage and need a HELOC or a fixed-rate second mortgage or you are purchasing a home that requires a HELOC then we have some options available that might match your financial needs.

Economic Calendar For January 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:

ISM Manufacturing report
ADP Employment (sometimes comes out the day before the 1st of the month)
ISM Non-Manufacturing PMI
BLS Employment report

Wednesday – January 27th:

MBA Purchase and Refinance Index: The Purchase Index came in at 334.2 and the Refinance Index came in at 4261.5 (both were declines).
Durable Goods Report: Last month the Durable Goods Report came in at 1.0 and the market was expecting a 0.9 report however the number came in at 0.2. Bonds rallied post report however it’s unclear if it will end up having a positive impact on January mortgage rates.

Tuesday- January 26th:

Monthly Home Prices: The Monthly Home Prices report came in with a gain of 1.0% (the annual report showed an 11% gain)
Consumer Confidence: The Consumer Confidence report came in at 89.0.

Friday – January 22nd:

PMI Composite (Market): The PMI Composite report (from Markit) came in stronger when compared to last month (58.0 vs 55.3). Bond markets rallied post report which can have a positive impact on consumer mortgage rates.
Existing Home Sales: Last month the annual rate came in at 6,690,00 units and this month the annual run rate came in at 6,760,000 units.

Thursday – January 21st:

Housing Starts: Last report the Housing Starts came in at 1,547,000 (annual rate) and this report the number came in at 1,669,000.
Philly Fed Index: The Philly Fed Index came in at 26.5; a big jump from last months report of 9.1.
Jobless Claims: Weekly Jobless Claims remain high. The most recent report showed 900,000 claims filed and over 5,000,000 continued to receive unemployment benefits.

Wednesday – January 20th:

MBA Purchase and Refinance Index: Last week the Purchase Applications report came in at 313.8 and the Refinance Applications report came in at 3917.6. This week the Purchase index came in at 348.2 and the Refinance Index came in at 4484.2.
NAHB Housing Market Index: The NAHB Housing Market Index came in at 83 and there was no impact to mortgage rates.

Thursday – January 14th:

Weekly Jobless Claims: The number of Americans filing for unemployment increased to 965,000 claims (last week it was 795,000).

Wednesday – January 13th:

MBA Purchase and Refinance Index: Last week the Purchase Index came in at 313.8 and this week the reading came in at 338.9. The Refinance Index was 3917.6 last week and this week it’s 4706.3.
Core CPI: Monthly CPI came in at 0.4% and the annual CPI came in at 1.6% (both are inline with expectations). There was no immediate impact to mortgage rates.

Friday – January 8th:

Employment Report: The market was expecting 71,000 jobs created in December however the report showed the economy lost 140,000 jobs – a huge miss. The unemployment rate remained at 6.7% and wages increased significantly (0.8%).

Thursday – January 7th:

Weekly Unemployment Claims: The market is anticipating the Weekly Unemployment Claims to come in at 833,000 after last week’s report showed 787,000 claims. Continued claims are expected to come in at 5,390,000 claims after last week’s report showed 5,219,000 continued claims. The report came in at 787,000 claims and continued claims came in at 5,072,000. Mortgage rates were unaffected by the report.
ISM Non-Manufacturing PMI: Expectations were for a reading of 54.6 and the reading came in at 57.2.

Wednesday – January 6th:

ADP Employment Report: Analyst and market participants were expecting the ADP Employment report to show 88,000 jobs reported however the report came in well below. The report showed a decline of -123,000 jobs. Bad news for the economy however the report did not have an immediate effect on mortgage rates.
MBA Purchase and Refinance Index: Last week the Purchase Applications report came in at 316.3 and the Refinance Applications report came in at 4169.0. This week the Purchase index came in at 313.8 and the Refinance Index came in at 3917.6.

Tuesday – January 5th:

ISM Manufacturing PMI: Expectations are for the ISM Manufacturing PMI report to come in at 56.5 after last month’s 57.5 reading. The reading came in at 60.7 and there was no impact to mortgage rates.

January 2021 Fed Meeting

On January 26th and 27th, the FOMC meets and at 2:00 pm they release their report. At this point in time is too early to tell how this meeting will go and if there will be an impact too mortgage rates. The most likely outcome is the Fed decides to stay the course and not make any adjustments.

Mortgage Rates And The Monthly Jobs Report

The market is expecting the monthly jobs report to show 100,000 jobs were created in December which is well below the 600k+ numbers we were seeing a few short months ago. If the report comes in as expected there probably won’t be any impact on consumer mortgage rates. However, if the number was significantly different then mortgage rates could come under pressure to move higher; especially if the Democrats take control of the Senate.

The first week of January will really set the tone for mortgage rates for the first few months of 2021.

Update:

The employment report was much worse than expected however bonds sold off post report (which may push mortgage rates higher). This report only confirms that we are more likely to see the government issue additional stimulus checks over the next few months. Today’s bond market action confirms that mortgage rates are under pressure to move higher (for now).

January 2021 Mortgage Rate Average In California

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

The average 30-year fixed mortgage rate in California is 2.625%.
The average 20-year fixed mortgage rate is 2.50%
The average 15-year fixed rate in California is 2.125%.

This is an average of everyone we’re seeing; from less than perfect credit to excellent credit. Please keep in mind that January 2020 mortgage rates adjust daily; sometimes multiple times during a day. For a mortgage quote specific to your situation please be sure to contact us directly.

Mortgage-Backed Securities & Treasury Snapshot

January 25th – January 29th:

Mortgage-Backed Security UMBS 2.0 started the week at the 103.20 level and the UMBS 2.5 coupon started at the 105.38 level. The 10y Treasury yield was at the 1.06% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 103.25 level and the UMBS 2.5 coupon was nearing the 105.38 level. The 10y Treasury yield was at 1.071%.

January 18th – January 22nd:

Mortgage-Backed Security UMBS 2.0 started the week at the 102.92 level and the UMBS 2.5 coupon started at the 105.09 level. The 10y Treasury yield was at the 1.10% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 103.17 level and the UMBS 2.5 coupon was nearing the 105.34 level. The 10y Treasury yield was at 1.09%.

January 11th – January 15th:

Mortgage-Backed Security UMBS 2.0 started the week at the 103.06 level and the UMBS 2.5 coupon started at the 104.97 level. The 10y Treasury yield was at the 1.11% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 103.03 level and the UMBS 2.5 coupon was nearing the 105.13 level. The 10y Treasury yield was at 1.08%.

January 4th – January 8th:

Mortgage-Backed Security UMBS 2.0 started the week at the 103.84 level and the UMBS 2.5 coupon started at the 105.36 level. The 10y Treasury yield was at the .94% level to start the week.

At the end of the week, Mortgage-Backed Security UMBS 2.0 was at the 103.16 level and the UMBS 2.5 coupon was nearing the 105.08 level. The 10y Treasury yield was at 1.10%.