Mortgage Rates and Related News

Keep up with current rates and news at HousingWire’s Mortgage Rates Center. Rates are updated twice weekly based on data from the Mortgage Bankers Association (MBA) and Freddie Mac‘s Primary Mortgage Market Survey (PMMS).

PMMS 1/21/2021

The average rate for a 30-year fixed loan fell two basis points last week to 2.77%. Now 12 basis points above the record low set Jan. 7, rates more closely resemble those seen over two months ago. The 15-year fixed mortgage rate also shifted downward to 2.21.

PMMS 1/14/2021

The average rate for a 30-year fixed loan rose from its previous record low by 14 basis points this week to 2.79%. This marks the first time mortgage rates have risen in almost two months. The 15-year fixed rate also rose slightly this week from 2.16% to 2.23%.

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According to Sam Khater, Freddie Mac’s chief economist, rising treasury yields have been putting pressure on rates to finally move up again.

“While mortgage rates are expected to increase modestly in 2021, they will remain inarguably low, supporting homebuyer demand and leading to continued refinance activity,” Khater said. “Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result.”

And take advantage they have. Mortgage applications jumped 16.7% last week according to the Mortgage Bankers Association, and refis hit a massive 93% year-over-year growth rate.

PMMS 1/7/2021

The average U.S. mortgage rate for a 30-year fixed loan fell two basis points this week to 2.65% – the lowest rate in the PMMS’ near 50-year history. The average fixed rate for a 15-year mortgage also fell last week to 2.16% from 2.17%.

Despite a full percentage point decline in rates over the past year, housing affordability is slipping as these low rates have been offset by rising home prices, according to Sam Khater, Freddie Mac’s chief economist.

“The forces behind the drop in rates have been shifting over the last few months and rates are poised to rise modestly this year. The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season,” Khater said.

This year’s record low rates may be setting a new norm. Len Kiefer, Freddie Mac‘s deputy chief economist, noted every decade since the 1980s experienced a 2% drop decade-over-decade. With rates sitting at close to 12% nearly 50 years ago, declining patterns may mean 30-year mortgage rates could average 2% the rest of the 2020s.

PMMS 12/31/2020

After falling to the lowest rate in the near 50-year-history of the PMMS last week, the average U.S. mortgage rate for a 30-year fixed loan remained at a survey-low 2.67% this week. The average fixed rate for a 15-year mortgage also fell this week to 2.17% from 2.19%.

“All eyes have been on mortgage rates this year, especially the 30-year fixed-rate, which has dropped more than one percentage point over the last twelve months, driving housing market activity in 2020,” said Sam Khater, Freddie Mac’s chief economist. “Heading into 2021 we expect rates to remain flat, potentially rising modestly off their record low, but solid purchase demand and tight inventory will continue to put pressure on housing markets as well as house price growth.”

Freddie Mac has reported survey-low rates 16 times in 2020, proving beneficial to borrowers looking to buy or refinance a home amid economic turmoil outside of the industry.

Mortgage spreads continue to compress, per Freddie Mac officials, with the 10-year Treasury yield remaining at or above 90 basis points through the beginning of December.

This week’s 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.71%, down from last week when it averaged 2.79%. That’s another sharp drop-off from this time last year, when the 5-year ARM averaged 3.46%.

PMMS 12/24/2020

The average rate for a 30-year fixed loan fell one basis point this week to 2.66%. This week’s rate broke the previous record set on Dec. 17. The average fixed rate for a 15-year mortgage also fell last week to 2.19% from 2.21%.

“The housing market is poised to finish the year strong as low mortgage rates continue to fuel homebuyer demand and refinance activity,” said Sam Khater, Freddie Mac’s chief economist. “Moving into 2021, we expect rates to hold steady but the key driver in the near term will be the trajectory of the COVID-19 pandemic and the execution of the vaccine.”

In a tumultuous year, months of record low rates made housing a bright spot for the economy. According to First American’s Potential Home Sales Model, historically low rates significantly drove the housing rebound from April through October.

Mark Fleming, chief economist at First American, estimates mortgage rates in 2021 will range from 2.8% to 3.3% and boost house-buying power while keeping purchase demand robust.

PMMS 12/17/2020

The average U.S. mortgage rate for a 30-year fixed loan fell four basis point this week to 2.67% – the lowest rate in the PMMS’ near 50-year history. This week’s mortgage rate broke the previous record set on Dec. 3. The average fixed rate for a 15-year mortgage also fell last week to 2.21% from 2.26%.

“The housing market continues to surge higher and support an otherwise stagnant economy that has lost momentum in the last couple of months,” said Sam Khater, Freddie Mac’s Chief Economist. “Mortgage rates are at record lows and pushing many prospective homebuyers off the sidelines and into the market.”

A Tuesday analysis from Fannie Mae’s Economic and Strategic Research group predicted rates would hit their trough at 2.7%, and since the 10-year Treasury yield has remained at or above 90 basis points through the beginning of December, spreads are continuing to compress.

Last week, Khater noted mortgage rates managed to retain their record low numbers despite higher Treasury yields – resisting a typical correlation.

A Wednesday statement from the Federal Open Market Committee revealed that the Federal Reserve plans to keep interest rates low until labor market conditions and inflation meet the committee’s standards. Fed Chairman Jerome Powell said to get inflation back to 2% though is going to “take some time.”

Overall, Fed purchases have helped to drive loan interest rates to the lowest level on record by boosting competition for bonds, which compresses yields.

PMMS 12/10/2020

Despite slightly higher Treasury yields, mortgage rates held steady at record lows this week. Rates remained at last week’s level of 2.71% for the 30-year fixed mortgage, and the 15-year fixed mortgage also remained unchanged from last week at 2.26%.

“Mortgage rates remain at record lows, resisting their typical correlation to Treasury yields, which have recently been moving higher,” Freddie Mac Chief Economist Sam Khater said. “Mortgage spreads – the difference between mortgage rates and the 10-year Treasury rate – are declining from their elevated levels earlier this year.”

And these low rates aren’t likely to go away anytime soon. CoreLogic recently released its final three-year housing and mortgage outlook report for the year, and if numbers hold up, the data company predicts 2021 will maintain its unprecedented home sales and record low rates as the economy continues to recover.

PMMS 12/3/2020

The average U.S. mortgage rate for a 30-year fixed loan fell one basis point this week to 2.71%, the lowest rate in the survey’s near 50-year history. The average fixed rate for a 15-year mortgage also fell last week to 2.26% from 2.28%.

According to Sam Khater, Freddie Mac’s chief economist, despite these persistently low mortgage rates, home sales are facing significant challenges.

“While homebuyer appetite remains robust, the scarce inventory has effectively put a limit on how much higher sales can increase. Unfortunately, the record low supply combined with strong demand means home prices are rapidly escalating and eroding the benefits of the low mortgage rate environment,” Khater said.

Reports of even lower rates circulated on Wednesday after United Wholesale Mortgage announced it was offering between 1.99% and 2.5% on FHA loans through its Conquest Program.

PMMS 11/25/2020

The average U.S. mortgage rate for a 30-year fixed loan remained unchanged at 2.72% this week. The average fixed rate for a 15-year mortgage also remained unchanged from last week at 2.28%.

These consistently low rates are advantageous for borrowers – putting 19.4 million “high quality” candidates up for refinance savings eligibility, according to a recent report from Black Knight. With current rates, Black Knight estimates some homeowners could save up to $400 or $500 a month.

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