Mortgage rates fell slightly this week, a retreat leaving homeowners an option not to refinance their home loans just yet.
The average cost of a 30-year fixed-rate mortgage fell from 3.33 percent last week to 3.32 percent. This is evident from Bankrate’s national survey of lenders. Interest rates hit a record low of 2.93 percent last month. The 15-year fix also fell, dropping to 2.56 percent from 2.62 percent last week.
The bank interest rate includes origination points and other fees in its number. The 30-year fixed-rate loans in this week’s survey contained an average of 0.34 rebate and origination points.
Millions of American homeowners could still benefit from a refinance.
“For some reason, there are a lot of people who haven’t refinanced,” says Brian Smith, mortgage advisor at Union Home Mortgage. “Some people need to hear the refinance message once and take action. Some people need to hear the message 10 or 20 times and then act. And some people wait until the opportunity is almost over. “
Mortgage rates fell after the coronavirus recession in spring 2020, a trend that boosted the surprisingly strong real estate market. The upward trend in Mortgage rates reflects signals of an economic turnaround.
“Interest rates were very low because our economy was very bad because of the pandemic,” said Melissa Cohn, executive mortgage banker at William Raveis Mortgage. “Hundreds of thousands of people have died. Millions of people were unemployed. But the good news is that the economy is getting better. This is all good for the world, but it does mean that prices are gradually rising. “
Meanwhile, house prices have risen sharply during the pandemic, and rock-bottom mortgage rates have helped raise property values. For homebuyers, and especially first-time buyers, rising prices pose a challenge to affordability.
In one sign, interest rates will continue to rise 10 year treasury yield, a key indicator of mortgage rates, has more than doubled in recent months. With the Democrats taking control of the White House and Congress, a generous stimulus plan has been passed – and more government spending could come.
“A small improvement in interest rates is possible but can be short-lived,” said Elizabeth Rose, director of sales at AmCap Mortgage in Dallas.
Interviewed mortgage experts by Bankrate disagree on where prices will go in the coming week, with 57 percent assuming prices will stay the same.