What’s happened to rates?

three wooden houses and a red up arrow on the sign. Real estate value increase. High rates of construction, high liquidity. Supply and demand. Rising prices for housing, building maintenance.
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Rates on 30-year fixed-rate mortgages jumped to an average 2.85% on Wednesday, from 2.78% a day earlier, according to Mortgage News Daily’s survey of lenders.

Mortgage rates had been plunging steadily, from one new all-time low to another, since the coronavirus pandemic began sinking the U.S. economy last March. They’re still very cheap compared to a year ago, when MND had 30-year fixed-rate loans averaging 3.69%.

But rates tend to follow the yield on the 10-year Treasury note, which shot above 1% on Wednesday for the first time since March.

That was after Republican incumbents lost to their Democratic challengers in Tuesday’s pair of U.S. Senate elections in Georgia.

News organizations called both races for the Democrats, which gives that party control over the Senate for the first time in six years, and by the narrowest of margins. The Democrats already had a majority in the House.

“Any time one party has full control, it's easier for the government to spend money. The result is more Treasury debt, and the level of Treasury debt is a key input for interest rates in general,” says Matthew Graham, chief operating officer of Mortgage News Daily.

Where might rates go from here?

Stressed couple sitting in their kitchen using computers
Monkey Business Images / Shutterstock

The sharp uptick in bond yields is likely to keep pushing mortgage rates higher in the coming days, Speakman says.

“But the broader path forward for mortgage rates remains less certain and largely dependent on the economy’s ability to continue to improve,” he says.

Rates still have a long way to rise before approaching historic norms. Plus, Speakman says rates fell in 2020 by less than what the bond market would normally indicate, which offers a buffer if bond yields continue to climb — mortgage rates may increase, too, but more modestly.

But you may need to move quickly to score the lowest rates of all time.

First, make sure you have a sparkling credit score and at least 20% equity in your home.

Then, prepare to do some shopping around, because rates can vary from one lender to the next. When you compare at least five rate quotes, studies show, you can save thousands of dollars over the life of your loan.

About the Author

Ethan Rotberg

Ethan Rotberg


Ethan Rotberg is a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.

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