30-year mortgage rate remains below 3% in latest Freddie Mac survey

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Despite rising 4 basis points, the average rate on a 30-year fixed mortgage stayed below 3 percent, averaging 2.99 in Freddie Mac’s most recent weekly survey.

Mortgage rates plunged in 2020 as the U.S. economy sagged during the coronavirus pandemic, but most experts expect 2021 to end with higher rates overall — though still low by historical standards.

In a separate survey by Bankrate, the average 30-year rate also rose, to 3.19 percent. The gap with Freddie Mac’s number is because Bankrate’s figure includes points and origination fees averaging 0.32 percent, while Freddie’s number excludes those costs. Freddie Mac said its rate is accompanied by an average of 0.8 of a point.

“Home prices continue to accelerate while inventory remains low, and new home construction cannot happen fast enough,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “There are many potential homebuyers who would like to take advantage of low mortgage rates, but competition is strong. For homeowners, however, continued low rates make refinancing an option worth considering.”

As Khater said, lower mortgage rates are great for refinancers, but the current market for prospective homebuyers is more mixed. Low mortgage rates remain a favorable factor, but limited housing supply coupled with more borrowing power is pushing prices up and increasing competition significantly in most locations. The mortgage and real estate markets can be especially unforgiving for low-income and minority homeowners, which may partly explain why more Black and Hispanic homeowners haven’t refinanced.

Where do mortgage rates go from here?

Most industry watchers expect rates to rise in the weeks and month ahead, but predict that they will remain very low by historical standards, possibly for years to come.

In the near term, the market should remain especially favorable for prospective refinancers. Most mortgage experts polled by Bankrate expect rates to hold stead for at least another week.

“Regardless of transitory numbers discussion about inflation, get in the hunt to buy a house or take another trip to get gas and you’ll see how real they are today,” said James Sahnger, a mortgage planner at C2 Financial Corp. in Jupiter, Florida. “Enjoy rates where they are but this could be the low point of the summer.”

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Written by
Zach Wichter
Mortgage reporter
Zach Wichter is a mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy.
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