Today's Best Mortgage and Refinance rates: December 4, 2020 | Rates Slide

New home construction in suburban areas continued to grow during the third quarter as home buyers put a premium on affordability and space.

Average mortgage rates are down once again, one day after Freddie Mac announced a new record-low interest rate.

Today's Mortgage Rates

The average rate for a 30-year fixed-rate purchase mortgage was 3.217% on Thursday. On Wednesday, the average rate was 3.283%.

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.

Source: Money | Date: Dec. 3, 2020 | Rates assume a credit score of 700

How do I get the best mortgage rates?

Mortgage rates vary from state to state. On Thursday, borrowers in Illinois were quoted the lowest mortgage rates — at 3.039%. People looking for mortgages in Nevada saw the highest average rate at 3.534%.

Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.868%, while those with credit of 620 or below were shown rates of 4.704%.

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 2.71% with 0.7 points paid for the week ending December 3. This is the 14th record low set so far this year and .01 percentage point below the previous low of 2.72%. 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 3.416% on Thursday. Last December, the average mortgage rate (including fees) was 3.88%.

Source: Money | Date: Dec. 3, 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 $889 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).

What else is happening in the housing market today?

New home construction in suburban areas accelerated during the third quarter, according to the National Association of Home Builders.

Suburbs located just outside of medium-sized cities saw the largest gain, increasing 15% over the previous year. By comparison, new construction within higher density urban areas was up just 5.7%.

"The growing demand in lower density markets stems from the fact that housing is less expensive compared to urban areas and buyers can afford larger homes to accommodate home offices, exercise rooms and other specialty rooms which are in higher demand since the pandemic," said NAHB Chairman Chuck Fowke.

Suburbs have become increasingly popular as remote work and the need for social distancing have put a premium on more spacious properties. As sales and construction in outlying areas have gone up, urban centers are seeing much slower growth.

According to the NAHB, the market share for single-family new home construction in urban-core areas fell from 18% to 17.2%, while the share for suburban areas and small metro core areas increased from 37.7% to 38.2%.

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Rates are subject to change. All information provided here is accurate as of the publish date.