The conventional wisdom was that as we emerged from the COVID-19 pandemic, mortgage rates would begin to climb back to more normal levels.
However, it doesn’t seem like that will be the case until at least after the summer months pass on by. And as fears about the virus mutating are starting to grip the country again, there’s no guarantee these rates will climb again until 2022.
According to Freddie Mac’s weekly lender survey, mortgage rates for a 15-year fixed rate loan hit an all-time low on July 22 while rates for 30-year loans also took a dip.
The 15-year fixed-rate mortgage averaged 2.12 percent, the lowest in the 30 years that this data has been kept. This beat the previous low of 2.16 percent set in January 2021.
“Unfortunately, many homebuyers are unable to take advantage of low rates due to low inventory and high prices.”
The record rate dropped one-tenth of a point from the week prior, and was down from 2.54 percent at the same time in 2020 when we were in the real throes of the pandemic.
The 30-year fixed-rate mortgage averaged 2.78 percent, which was down one-tenth of a point from the previous week and fell from 3.01 percent at the same time in 2020. The record low for 30-year loans is 2.65 percent, set in the first week of January 2021. The 30-year rates have been kept weekly since 1971.
“Concerns about the (COVID-19) Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth,” Freddie Mac Chief Economist Sam Khater told Inman. “While the economy continues to mend, Treasury yields have decreased, and mortgage rates have followed suit. Unfortunately, many homebuyers are unable to take advantage of low rates due to low inventory and high prices.”
Freddie Mac’s weekly lender survey tracks standard home purchase loans for borrowers who have a down payment of 20 percent and are considered to have excellent credit. Those who make a smaller down payment, have a lower credit score, or who are seeking bigger loans can expect to be quoted higher mortgage rates.
There was a rise in rates in both February and March 2021, but they have since decreased and have hovered around 3 percent, or just below. With home prices and rents ballooning, there might be a trickle-down effect that could bring about higher rates by the Fall.
Inflation could force the Federal Reserve to pull back on the purchase of mortgage bonds and treasuries. If that were to be the case, mortgage rates would rise back above three percent and slowly climb even higher.
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
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