E Economics

US 30-Year Mortgage Rates Fell Below 3%

23 April, 2021
30-year mortgage rate

US 30-year mortgage rates fell for the third straight week and reached a 8-week low. According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 2.97 percent for the week ending April 22, 2021. It was down from the previous week when it averaged 3.04 percent. A year ago at this time, the 30-year FRM averaged 3.33 percent.

Over the same period, the report showed the 15-year fixed-rate mortgage dropped for the third straight week and hit a 9-week low. It averaged 2.29 percent (down from 2.35 percent last week). A year ago at this time, the 15-year FRM averaged 2.86 percent.

In the meantime, Mortgage News Daily also highlighted “Mortgage rates fell to the lowest levels since March 2nd or 3rd (depending on the lender)“. The recent decline in mortgage rates followed a drop in treasury yields and should support a rebound of existing home sales in the short term. However, the bounce could be limited by the lack of supply. Yesterday, the National Association of Realtors revealed that, in March, total housing inventory were down 28.2 percent from one year ago. In this context, it added “Inventory numbers continue to represent near-historic lows“.

Meanwhile, the decrease in mortgage rates also translated into a slight resuregence in refinancing activity. According to Mortgage Bankers Association, last week, the volume of refinance applications rose for the first time in 7 weeks. They rose 10.4 percent but were still down 23.5 percent compared with the same week one year ago. Sam Khater, Freddie Mac’s Chief Economist, said “The drop in mortgage rates is good news for homeowners who are still looking to take advantage of the very low rate environment“.