Latest mortgage rates: Refinancing window stays open

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Mortgage rates rose a bit this week but remain near record lows. The average rate on 30-year mortgages edged up to 3.05 percent from 3.03 percent last week, according to Bankrate’s weekly survey of large lenders.

For homeowners, the biggest takeaway is that mortgage rates are hovering near the all-time bottom achieved earlier this year. A year ago, the benchmark 30-year fixed-rate mortgage was 3.1 percent. Four weeks ago, the rate was 3.04 percent. The 30-year fixed-rate average for this week is 0.33 percentage point below the 52-week high of 3.34 percent, and just 0.12 percentage point higher than the 52-week low of 2.93 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.37 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.10 percent.

Where mortgage rates are headed

Mortgage experts are mixed about the future direction of rates. In Bankrate’s survey this week, 50 percent of respondents predict rates will fall in the coming week (Sept. 23-29), 67 percent say they’ll stay the same and none predict an increase.

“Rates should remain flat this week as the Fed only gave hints and not action,” said Gordon Miller of Miller Lending Group.

Few things about the post-COVID economy have turned out quite as expected. The mortgage market continues to defy predictions that rates will start a slow-but-sure climb, and the combination of a COVID-19 resurgence and trouble with real estate in China have added to the uncertainty.

Refinances are a great deal with rates this low

Rates are just a few basis points above the record lows reached earlier this year, so refinancing remains a historically excellent deal. While the rate on 10-year bonds issued by the U.S. government had hovered around 1.5 percent in the spring, it hit the 1.3 percent range this week. The 10-year Treasury is closely tied to 30-year mortgage rates.

Despite the week-to-week ebbs and flows, economists generally expect rates to rise by the end of 2021. As mortgage rates make a predicted slow climb to the 3.5 percent range by year’s end, decreased purchasing power might ease some of the pressure on home prices as marginal buyers are pushed out of the market, but competition will still be intense among those who can still afford to buy. Those looking to refinance should be able to find good deals for the rest of the year, though at rates at bit higher than the current level.

The bottom line: If you see a rate that fits your needs and budget, it may be time to do that refinance now. In fact, many homeowners with a mortgage haven’t taken advantage of the low rate environment. Among homeowners with a mortgage they’ve had since before the pandemic, 74 percent have not refinanced, according to a new Bankrate survey.

“The overwhelming majority of mortgage borrowers have not yet refinanced, despite record-low rates over the past year,” says Greg McBride, Bankrate’s chief financial analyst. “Cutting the monthly mortgage payment by $150 or $250, possibly more, can create valuable breathing room in the household budget at a time when so many other costs are on the rise.”

Methodology

The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. “Lenders surveyed each week are a mix of lender types – thrifts, credit unions, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.

Written by
Jeff Ostrowski
Senior mortgage reporter
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.
Edited by
Senior mortgage editor