US mortgage rates remain close to record low. According to Freddie Mac, 30-year fixed-rate mortgage averaged 2.73 percent for the week ending February 4, 2021, unchanged from last week. A year ago at this time, it averaged 3.45 percent.
Over the same period, the report also showed that 15-year fixed-rate mortgage averaged 2.21 percent, slightly up from last week when it reached 2.20 percent. A year ago at this time, it averaged 2.97 percent.
US mortgage rates have steadily declined since mid-2018 and reached record low level in late 2020. In this context, Sam Khater, Freddie Mac’s Chief Economist highlighted “This rate environment is advantageous for those who are looking to refinance in order to strengthen their financial position. While many have already refinanced, the evidence suggests that upper income homeowners have taken advantage of the opportunity more so than lower income homeowners who could stand to benefit the most by lowering their monthly mortgage payment.”
On Wednesday, Mortgage Bankers Association (MBA) data showed that mortgage refinancing activity rebounded strongly last week. The refinance index increased by 11.4 percent in week ended Jan. 29, reaching the highest level since March 2020.
The sharp drop in borrowing costs has supported the housing industry with prices rising at the fastest pace since May 2014 in November. The trend is unlikely to change as the US economy showed signs of resilience (positive for demand) and supply remains limited (record low inventory).