U.S. Mortgage Rates Dropped To Another Record Low


U.S. mortgage rates kept falling in the first week of 2021, with the 30-year hitting the lowest level on record. It was the 17th record low since the coronavirus started affecting financial markets last March. According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 2.65 percent (down from 2.67 percent last week), the lowest rate in the survey’s history which dates back to 1971. A year ago, it stood at 3.64 percent.


mortgage rates


After exceeding 18 percent in late 1981, U.S. mortgage rates (30-year) have steadily declined and have been consistently below 4 percent since June 2019. The decline in borrowing costs has supported the housing industry boosting both transactions and prices. As a matter of fact, in October, the S&P CoreLogic Case-Shiller index (20-City Composite) increased at the fastest pace since June 2014.


In addition, on the supply side, the latest NAR report highlighted that available inventory declined 22% YoY to 1.28 million units in November (the lowest in data back to 1982). As a result, home price indexes are likely to rise even faster in both November and December despite virus resurgence.


Meanwhile, refinance activity is also expected to gain traction in the short term with borrowers being able to adjust downward monthly payments or freep up cash.



Share on facebook
Share on twitter
Share on linkedin
Share on print
Share on email

Get in touch

If you would like to conduct an interview, call me for a conference, contribute to the blog, or for any other request, you can contact me directly. You will also find the contact details of Market Securities if you would like to receive their research offer (dedicated to institutional investors).