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By Leslie Cook
Updated: December 17, 2020 10:01 AM ET
Money; Getty Images

After three months of records, builder confidence took a step back in December due to concerns about rising construction costs. Despite the slide, builders are still feeling more positive about the housing market than they have in years.

Mortgage rates increased by 0.11 percentage points today.

Today’s Mortgage Rates

The average rate for a 30-year fixed-rate purchase mortgage was 3.103% on Wednesday. On Tuesday, the average rate was 3.092%.

Money’s mortgage rates include data from over 8,000 lenders across the United States and are updated daily. These rates include discount points and represent what a borrower with a 20% down payment and 700 credit scores — roughly the national average FICO score — would have been quoted.

Mortgage Rates for December 17, 2020
Loan type Average Rate
30-Year Fixed Loan 3.103%
15-Year Fixed Loan 2.331%
30-Year FHA Loan 3.217%
30-Year VA Loan 3.196%
30-Year Jumbo Loan 3.624%
Source: Money | Date: Dec. 16, 2020 | Rates assume a credit score of 700
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How do I get the best mortgage rates?

Mortgage rates vary from state to state. On Wednesday, borrowers in Washington, D.C. were quoted the lowest mortgage rates — at 2.997%. People looking for mortgages in Nevada saw the highest average rate at 3.286%.

Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.851%, while those with credit of 620 or below were shown rates of 4.577%.

You may be able to negotiate a lower rate if you shop around or if you have other accounts with the lender. (Money’s picks for the best mortgage lenders are here.) Currently, some lenders are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.

Freddie Mac’s widely quoted Primary Mortgage Market Survey put rates at 2.67% with 0.7 points paid for the week ending December 17. It is the 15th new record set this year. The mortgage purchaser’s weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.

Today’s Mortgage Refinance Rates

Money’s survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.232% on Wednesday. Last December, the average mortgage rate (including fees) was 3.88%.

Refinance Rates for December 17, 2020
Loan type Average Rate
30-Year Fixed Loan 3.232%
15-Year Fixed Loan 2.617%
30-Year FHA Loan 3.563%
30-Year VA Loan 3.656%
30-Year Jumbo Loan 3.547%
Source: Money | Date: Dec. 16, 2020 | Rates assume a credit score of 740

A homeowner with a $200,000 mortgage balance currently paying 3.88% on a 30-year could potentially cut their monthly payment from about $940 to about $868 by financing at the current lower rates. To determine if it’s worth it to refinance your mortgage, also consider the closing fees you paid on your current mortgage, how much your new lender is charging and how long you have left on your loan term. (Our picks for the best lenders for refinancing are here).

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What else is happening in the housing market today

Builder confidence in the newly built single-family home market slipped during the month of December. The National Association of Home Builders’ Housing Market Index decreased 4 points to a reading of 86 from a record-high of 90.

December marked the first time in three months that the index has dropped, but was still the second-highest reading in the history of the index. “Builder confidence fell back from historic levels in December, as housing remains a bright spot for a recovering economy,” said NAHB Chief Economist Robert Dietz.

The slight decline reflected renewed concern over rising material costs, land and material availability, and a shortage of skilled labor. Low housing inventory, high demand, and increasing mortgage rates in the coming year could affect buyers ability to purchase a home.

“As the economy improves with the deployment of a COVID-19 vaccine, interest rates will increase in 2021, further challenging housing affordability in the face of strong demand for single-family homes,” added Dietz.

The index gauges builder perception of current home sales and sales expectations for the next six months, issuing ratings of “good,” “fair,” or “poor.” Any reading over 50 indicates builders view conditions being good.

Mortgage Tip of the Week

Buying a home can be daunting. Follow these expert tips to make the process easier.

From Brendan Phillips, capital markets analyst at Better.com:

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