Average mortgage rates stay down in the cellar

Businessman holding the down arrow on wooden blocks with the word Rate and house. Low interest in mortgages. Reducing interest payments for mortgage. The fall in housing rates on credit.
Andrii Yalanskyi / Shutterstock

Mortgage rates have ticked higher this week to an average 3.21% for a 30-year fixed-rate home loan, from last week's 3.18%, mortgage company Freddie Mac reported on Thursday.

Rates are still within striking distance of the reading from two weeks ago, which was the lowest ever seen in Freddie Mac's nearly 50-year-old weekly survey. Then, 30-year mortgages plummeted to an average 3.15%.

The survey rates come with an average 0.7 point. One year ago, borrowers were finding 30-year fixed mortgages with typical rates of 3.82%.

The benchmark mortgage rate has been at 3.33% or lower, on average, since early April, and Freddie Mac predicts rates will average 3.3% throughout this year. That's far below 2019's 3.9%.

In recent weeks, diligent comparison shoppers have been finding 30-year rates below 3% — even all the way down to 2.5%.

Use the mortgage calculator below to get a look at the low monthly payment available with one of today's low mortgage rates:

Low rates stir up homebuyers and homeowners

Back view of couple with arms above after buying house
wavebreakmedia / Shutterstock

Tantalizing mortgage rates are helping the housing market recover from its COVID-19 slump, says Sam Khater, chief economist at Freddie Mac.

"The rebound in homebuyer demand continued this week, driven by mortgage rates that hover near record lows," Khater says. "This turnaround in demand, particularly by those who have higher incomes than the typical household, also reflects deferred sales from the spring."

Applications for mortgages to buy homes rose 5% last week, the Mortgage Bankers Association reported on Wednesday.

Demand for "purchase loans" might be even higher if not for restrictions being put in place by wary lenders during the pandemic.

"Even with rates hovering near all-time lows, obtaining a loan will be challenging for many buyers as lenders continue to tighten underwriting standards," says George Ratiu, senior economist with Realtor.com.

Meanwhile, homeowners have stepped up their refinancing as mortgage rates stay down. Refi applications surged 11% last week and were up 80% from a year ago.

But many owners have been slow to take advantage of the opportunity to refinance and slash their interest costs. An estimated 14 million mortgage holders are good refi candidates and could cut their monthly payments by an average $282, says mortgage data firm Black Knight.

Other mortgage rates this week

American street with beautiful houses
Podlesnyak Nina / Shutterstock

Rates on other popular types of mortgages also have held steady this week, according to Freddie Mac.

The average for a 15-year fixed-rate mortgage is unchanged for the second week in a row at 2.62%, the survey says. Fifteen-year loans are commonly used for refinances. Those mortgages were averaging 3.26% one year ago.

And, rates on 5/1 adjustable-rate mortgages aven't changed this week. Those loans are commonly known as "ARMs" and have rates that are fixed for five years and then can adjust up or down every year.

ARMs are currently being offered at initial rates averaging 3.10%. At this time last year, the starter rates on those mortgages were typically 3.51%.

Take a look at today's lowest mortgage rates available where you are:

About the Author

Doug Whiteman

Doug Whiteman

Editor-in-Chief

Doug Whiteman is the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

You May Also Like

Take a Break From Your Debt This Month

Let debt consolidation give you a break.

If You Owe $25K+ in Student Loans, This Site Could Help You Pay Them Off Faster

If student loan debt is dragging you down, this company can help.

These 5 Passive Income Ideas Can Help You Through COVID-19

People laid off because of COVID-19 are finding other, novel ways to earn money.

The 6 Factors That Decide Your Health Insurance Costs (and 3 That Don't)

Here are the facts about your premiums as well as a few common myths.