U.S. 30-Year Mortgage Rates Hit The Highest Since August

US 30-year mortgage rates rose for the second straight week. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 2.97 percent for the week ending February 25, 2021 (highest level since August 2020), up from last week when it averaged 2.81 percent. A year ago at this time, the 30-year FRM averaged 3.45 percent.

Over the same period, the report also showed the 15-year fixed-rate mortgage averaged 2.34 percent (highest level since November 2020), up from last week when it averaged 2.21 percent. A year ago at this time, the 15-year FRM averaged 2.95 percent.

In this context, Sam Khater, Freddie Mac’s Chief Economist noted “Though rates continue to rise, they remain near historic lows. However, when combined with demand-fueled rising home prices and low inventory, these rising rates limit how competitive a potential homebuyer can be and how much house they are able to purchase.” As a matter of fact, earlier this week, I highlighted that U.S. home loan purchase applications fell for the third straight week, reaching a 9-month low.

US 30-year mortgage rates have steadily declined since mid-2018 and reached record low levels in late 2020. However, the recent spike in Treasury yields — partly explained by stronger growth and inflation prospects — could mean that the bottom is now behind us. Yesterday, Mortgage News Daily reported that “Most any mortgage lender added another eighth of a percent to their 30yr fixed rate offerings. Over the course of the past week, most lenders are .25-.375% higher. And compared to the beginning of last week, many lenders are a full HALF POINT higher. In other words, what had been 2.75% is now 3.25%. What had been 2.875% is now 3.375%.”