E Economics

30-Year Fixed-Rate Mortgages Hit A 9-Month High

26 March, 2021



     

    U.S. 30-year fixed-rate mortgages rose for the sixth straight week, climbing to the highest level in more than nine months. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.17 percent for the week ending March 25, 2021 and up from the previous week when it averaged 3.09 percent. A year ago at this time, the 30-year FRM averaged 3.50 percent.

     

    30-Year Fixed-Rate Mortgages

     

    Over the same period, the report also showed the 15-year fixed-rate mortgage averaged 2.45 percent (up from 2.40 percent last week and the highest level since August 2020). A year ago at this time, the 15-year FRM averaged 2.92 percent.

     

    15-Year Mortgage Rates

     

    Concerns over the potential for higher inflation, a strong economic recovery and a massive federal government deficits have pushed Treasury yields and mortgage rates higher. In this context, Sam Khater, Freddie Mac’s Chief Economist, said “Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power. Unfortunately, this has disproportionately affected the low end of the market, where supply is the slimmest.

     

    While mortgage rates remain low by historical standards, the spike threatens to crimp the ongoing housing rally. Earlier this week, mortgage refinancing index fell six out of the last seven weeks and reached the lowest level since September 2020.

     

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