Fixed mortgage rates rose sharply this week but stayed below 3% due to Fed decision keep interest rates low.
The interest rate on the 30-year mortgage loan averaged 2.98%, one basis point higher than last week, according to Freddie Mac’s primary mortgage market survey. The 30-year fixed-rate mortgage has declined 20 basis points since it peaked in June 2020.
Meanwhile, the 15-year fixed rate loan rose from 2.29% to 2.31% week after week. The five-year Treasury-indexed hybrid floating rate mortgage fell from 2.83% last week’s average to 2.64%.
“Given the rising number of COVID cases worldwide, US Treasury bond yields stopped rising a month ago and remained in a tight range as the market digested incoming economic data,” said Freddie Mac chief economist Sam Khater. “The good news is that refinancing at rates below 3% remains attractive to many borrowers who financed before 2020. However, for avid buyers, especially first-time buyers, stocks remain extremely tight and competition for available homes remains high. “