Mortgage Rates Higher Than at Any Point in 2021
After a string of record-breaking low mortgage rates last year, 2021 has ushered in a new direction for rates. Unfortunately, that direction is up.
It’s not all bad news though. Rates are rising due to expectations that trillions in new economic stimulus will spur a faster economic recovery.
The downside of recovery is inflation. And the investors that influence mortage rates through the purchase of mortgage bonds really hate inflation. They’ll be less likely to buy the bonds, the bonds’ value will drop, and rates will rise.
It’s already happening, but there’s still time to act.
Rates are moving from the lowest point ever. Even if they’re a little higher than last year, they’re still low by historical standards. If you’ve been waiting to secure a still-low-rate for a home purchase or refinance, now may be the time to do so.
Take a look below of the report that the National Association of REALTORS® just released.
Mortgage rates have taken a big leap at the start of the new year. In the first week of 2022, the 30-year fixed-rate mortgage jumped nearly 60 basis points higher than a year earlier, averaging 3.22% this week, Freddie Mac reports.
“Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are more than half a percent higher than January 2021,” says Sam Khater, Freddie Mac’s chief economist. “With higher inflation, promising economic growth, and a tight labor market, we expect rates will continue to rise. The impact of higher rates on purchase demand remains modest so far given the current first-time home buyer growth.”
The National Association of REALTORS® forecasts that mortgage rates will average 3.7% by the end of this year.
Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 6:
- 30-year fixed-rate mortgages: averaged 3.22%, with an average 0.7 point, increasing from last week’s 3.11% average. Last year at this time, 30-year rates averaged 2.65%.
- 15-year fixed-rate mortgages: averaged 2.43%, with an average 0.6 point, increasing from last week’s 2.33% average. A year ago, 15-year rates averaged 2.16%.
- 5-year hybrid adjustable-rate mortgages: averaged 2.41%, with an average 0.5 point, unchanged from last week. A year ago, 5-year ARMs averaged 2.75%.
Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.