The rate on a 30-year fixed mortgage has fallen again this week, according to Freddie Mac. It averaged 2.73% in the mortgage giant’s latest survey, down 4 basis points from last week’s average.
With the US economy sagging due to the coronavirus pandemic, mortgage rates plunged in 2020. Experts have long anticipated that this trend would slowly begin to reverse in 2021.
In a separate rate survey by Bankrate, the 30-year average rate fell to a new high, averaging 2.93 percent. The variance with the Freddie Mac count is due to the fact that the Bankrate figure includes points and set-up costs by an average of 0.32%, while the Freddie count excludes these costs. Freddie Mac said his average came with an average of 0.8 points.
“As the market reacts to a new administration in Washington and the economic malaise caused by COVID-19, mortgage rates have continued to fall this week, just slightly,” said Sam Khater, chief economist at Freddie Mac, in a statement. communicated. “Even though home prices are rising at the fastest rate we’ve seen in years, competition to buy is strong given the low inventory that exists across the country. The fact that there is not enough housing to meet demand will be a constant problem for the foreseeable future. “
Where do the fares go from here?
Over the coming weeks and months, the mortgage market could fluctuate, but these record high rates are unlikely to last forever. Most industry watchers believe rates will start slowly rising, even if they stay very low by historical standards, possibly for years to come.
Even so, mortgage experts polled by Bankrate mainly expect rates to drop again next week.
“The rise in bond yields at the start of the year was too large, too early and has since declined,” said Greg McBride, chief financial analyst at Bankrate. “Mortgage rates will be limited amid uncertainty over further stimulus.”