If you need assistance, please call 302-604-4746

Mortgage Interest Rates Hit Their Lowest Rate Ever Recorded—Again

Tuesday, January 5, 2021   /   by Frank Hornstein

Mortgage Interest Rates Hit Their Lowest Rate Ever Recorded—Again

Mortgage Interest Rates Hit Their Lowest Rate Ever Recorded—Again

Amy Dobson

As we near the end of the year, mortgage interest rates continue to rock bottom yet again.

Rates for a 30-year, fixed-rate loan closed out the week of December 17 at 2.67%, four basis points lower than the previous low of 2.71% seen for the past two weeks, as the Freddie Mac weekly survey indicates. This is a slightly steeper decline than we have been seeing most weeks when the rates would only take one or two basis points off to reach their new low.

The same trend appeared with the 15-year loans, dropping to 2.21%, down from 2.26% the week before.

At the beginning of the pandemic, when rates started seeing their first wave of record lows, many industry pundits were saying they would never dip below 3%. That was proven wrong in mid-July when they settled at 2.98% for a 30-year loan and 2.58% for a 15-year loan.

Now the question becomes will rates dip under the 2% threshold. It is looking very possible for 15-year loans to reach that territory, and for 30-year loans, it isn’t out of the question.

As expected, demand is keeping pace with the low rates. According to the Mortgage Bankers Association weekly report, purchase applications are up 2% compared to a week ago, but 26% compared to one year before. Refinance applications are still the dominant driver of activity, nudging up by 1% over the past week but a whopping 105% compared to last year.

Something to keep an eye on is the government loan activity since FHA loans are trending slightly upwards. Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, posits, “Government purchase applications rose for the sixth straight week to the highest level since June—perhaps a sign that more first-time buyers are entering the market."

In just a few months we can expect a very competitive housing market to be the reality. There just isn’t enough inventory to meet all the demand. And with rates expected to stay this low for the near future, buyers will want to buy a home as quickly as they can. I expect to see some more downward dips in interest rates before they reverse course. In the spirit of the holidays, it won’t be once more with feeling. But once more with fewer basis points.

Follow me on Twitter or LinkedIn

My work has appeared in The Washington Post, New York Times, San Francisco Chronicle, and a variety of other publications. Real estate has been a main beat of mine for

Iron Valley Real Estate | Frank Hornstein Group
Frank Hornstein
17527 Nassau Commons Boulevard
Rehoboth Beach, DE 19971
Cell: 302-604-4746
Office: 302-541-8787

The data relating to real estate for sale on this website appears in part through the BRIGHT Internet Data Exchange program, a voluntary cooperative exchange of property listing data between licensed real estate brokerage firms in which Iron Valley Real Estate | Frank Hornstein Group participates, and is provided by BRIGHT through a licensing agreement. The information provided by this website is for the personal, non-commercial use of consumers and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Some properties which appear for sale on this website may no longer be available because they are under contract, have Closed or are no longer being offered for sale. © 2021 BRIGHT, All Rights Reserved Information Deemed Reliable But Not Guaranteed. Data last updated: September 22, 2021 4 PM.
This site powered by CINC: www.cincpro.com