Upward pressure on rates won’t likely be enough to cool spring selling season, says Freddie Mac economist.
The 30-year fixed-rate mortgage continued to move higher this week, now averaging 3.05%, Freddie Mac reports.
“It looks like rates in the 2% range are over while current mortgage rates will likely be the lowest,” Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, writes on the association’s Economists’ Outlook blog. “Since the pandemic struck our country one year earlier, year-over-year comparisons for most of the economic indicators are going to be much higher for the next several months.” Many of these higher readings will put upward pressure on the 10-year Treasury yield, which mortgage rates tend to follow.
Still, mortgage rates remain historically low, if in the 3% range. The all-time low for the 30-year fixed-rate mortgage was set in January, averaging 2.65%.
“As the economy improves given labor market optimism, continued vaccination roll-out, and additional stimulus pending, mortgage interest rates increased this week,” says Sam Khater, Freddie Mac’s chief economist. “But even as rates rise modestly, the housing market remains healthy on the cusp of spring home buying season. Home buyer demand is strong and, for homeowners who have not refinanced but are looking to do so, they have not yet lost the opportunity.”
Freddie Mac reports the following national averages with mortgage rates for the week ending March 11:
- 30-year fixed-rate mortgages: averaged 3.05%, with an average 0.6 point, rising from last week’s 3.02% average. Last year at this time, 30-year rates averaged 3.36%.
- 15-year fixed-rate mortgages: averaged 2.38%, with an average 0.6 point, increasing from last week’s 2.34% average. A year ago, 15-year rates averaged 2.77%.
- 5-year hybrid adjustable-rate mortgages: averaged 2.77%, with an average 0.3 point, increasing from last week’s 2.73% average. A year ago, 5-year ARMs averaged 3.01%.
Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining a mortgage.
Source: Freddie Mac and “Instant Reaction: Mortgage Rates, March 11, 2021,” National Association of REALTORS® Economists’ Outlook blog