Mortgage rates resume their rise as economic outlook brightens

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Mortgage rates resumed their upward march this week, a move that reminds homeowners that a historic refinance window is not quite as wide as it once was.

The average cost of a 30-year fixed-rate mortgage rose to 3.23 percent from last week’s 3.16 percent, according to Bankrate’s national survey of lenders. Rates reached a record low of 2.93 percent last month. The 15-year fixed also climbed, edging up to 2.58 percent from last week’s 2.49 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 0.33 discount and origination points.


Homeowners who have been considering a refinance should pull the trigger now, most experts advise.

Mortgage rates plummeted after the coronavirus recession struck in the spring of 2020, a trend that helped drive the surprisingly strong housing market. While the upward trend in mortgage rates reflects signals of an economic turnaround, the recovery so far has been uneven and incomplete.

Meanwhile, home prices have risen robustly during the pandemic, and rock-bottom mortgage rates pushed rates 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 risen to its highest point in a year. With Democrats taking control of the White House and Congress, a generous stimulus bill is at hand.

“We think we’ll be north of 3.5 percent by the end of the year,” Michael Fratantoni, chief economist at the Mortgage Bankers Association, said Wednesday during an online conference hosted by ICE Mortgage Technology. “Historically speaking, that’s still a very low mortgage rate.”

Fratantoni expects the refi boom to cool this year, but he predicts record levels of purchase mortgages.

More than half of mortgage experts polled by Bankrate expect rates to take a breather in the coming week. However, most expect rates to rise in the longer run.

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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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