Mortgage rates fell ever so slightly this week, according to a Bankrate survey released Wednesday. The dip might reflect intensifying competition among lenders, or investors’ recalibration of the path of the U.S. economy.
Whatever the reason, the average cost of a 30-year fixed-rate mortgage fell to 3.00 percent from last week’s 3.01 percent in Bankrate’s national survey of lenders. The 15-year fixed also fell, edging down to 2.39 percent from the previous week’s 2.45 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 0.31 discount and origination points.
Mortgage rates have been in steady decline since the coronavirus recession struck in the spring of 2020, a trend that has helped drive the surprisingly strong housing market. The downward trend in mortgage rates reflects mixed signals from the economy. The latest spike in coronavirus cases undermined hopeful signs that COVID-19 vaccines soon will curb the pandemic, and the economic recovery so far has been uneven and incomplete.
In one sign of optimism, the 10-year Treasury yield, a key indicator for mortgage rates, has held above 1 percent. With Democrats taking control of the White House and Congress, the logic goes, a generous stimulus bill will follow. However, some think the stimulus has been overhyped.
“The push up in rate from the expected new stimulus plan was overdone,” says Joel Naroff, an economist in Holland, Pennsylvania.
Mortgage experts polled by Bankrate are evenly divided about the direction of rates. A third expect rates to rise in the coming week, while a third predict rates will fall and a third think they’ll stay flat. Some think the refinancing window will close soon.
“Janet Yellen is urging Congress to ‘act big’ and ‘big’ will absolutely impact the country and rates going forward,” says James Sahnger, mortgage planner at C2 Financial Corp. in Jupiter, Florida. “If you haven’t refinanced yet, it’s time to get going.”