E Economics

U.S. Mortgage Rates Kept Climbing This Week

18 March, 2021

U.S. mortgage rates kept climbing with the 30-year rising for the fifth straight week. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.09 percent for the week ending March 18, 2021 (highest since June 2020) and up from the previous week when it averaged 3.05 percent. A year ago at this time, the 30-year FRM averaged 3.65 percent.


30-Year-Mortgage-Rate-March 18


Over the same period, the report also showed the 15-year fixed-rate mortgage averaged 2.40 percent (up from 2.38 percent last week and the highest level since September 2020). A year ago at this time, the 15-year FRM averaged 3.06 percent.


15-year-mortgage-rate-March 18


In the meantime, data from Mortgage News Daily News showed that average 30-year fixed mortgage rates hit 3.40% yesterday, the highest since April 2020.


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. This morning, the yield on the 10-year Treasuries that guide mortgage rates has ticked up above 1.7% for the first time since January 2020. Therefore, it seems that the bottom is probably behind us.


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


US mortgage refinancing


In the meantime, Sam Khater, Freddie Mac’s Chief Economist said “residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers.