Mortgage rates fall again, extending refi possibilities

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Mortgage rates fell again this week, a pullback that further widens the window for homeowners who have yet to refinance their home loans.

The average cost of a 30-year fixed-rate mortgage ticked down to 3.21 percent from last week’s 3.27 percent, according to Bankrate’s national survey of lenders. Rates reached a record low of 2.93 percent in January. The 15-year fixed-rate mortgage also fell, dropping to 2.48 percent compared to last week’s 2.57 percent.

Bankrate includes origination points and other fees in its figure. The 30-year fixed-rate loans in this week’s survey included an average total of 0.3 discount and origination points.


The rate turnabout offers an opportunity for millions of American homeowners who still could benefit from refinancing.

“For whatever reason, there are a lot of people who haven’t refinanced,” says Brian Smith, mortgage advisor at Union Home Mortgage in Ohio. “Some people need to hear the refinance message one time and they take action. Some people need to hear the message 10 times, or 20 times, and then they act. And some people wait until the opportunity is almost gone.”

Mortgage rates plummeted after the coronavirus recession struck in the spring of 2020, a trend that helped drive the surprisingly strong housing market. The upward trend in mortgage rates reflects signals of an economic turnaround.

However, COVID-19 remains a threat to much of the world, a reality that has created clouds over the global economic outlook, says Logan Mohtashami, housing analyst at HousingWire.

“We are getting closer and closer to being able to walk the earth freely here in America, but this isn’t the case in other countries,” he says.

Meanwhile, home prices have risen robustly during the pandemic, and rock-bottom mortgage rates helped push home values higher. For homebuyers, and especially first-time buyers, rising prices pose an affordability challenge.

In one sign the rates will continue to rise, the 10-year Treasury yield, a key indicator for mortgage rates, has more than doubled in recent months. With Democrats taking control of the White House and Congress, a generous stimulus bill has been enacted — and more government spending could be coming.

“The good economic news has been priced in, and the Fed is consistent in their messaging that they intend to support the recovery with low rates for quite some time,” says Greg McBride, Bankrate’s chief financial analyst.

Mortgage experts polled by Bankrate are evenly divided about where rates will go in the coming week, with half expecting rates to stay the same and half predicting a decline.

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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.
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