Mortgage rates retreat a bit, underscoring refi opportunity

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The window for mortgage refinancing opened a bit this week as mortgage rates took a break from their recent rise.

The average cost of a 30-year fixed-rate mortgage dipped to 3.31 percent from last week’s 3.34 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 dipped, edging down to 2.57 percent from last week’s 2.64 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.


Millions of American homeowners still could benefit from refinancing. The recent downturn in rates offers an opportunity.

“For whatever reason, there are a lot of people who haven’t refinanced,” says Brian Smith, mortgage advisor at Union Home Mortgage. “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. 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 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 been rising. With Democrats taking control of the White House and Congress, a generous stimulus bill has been enacted.

“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 recently. “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.

Mortgage experts polled by Bankrate are divided about where rates will go in the coming week, with 38 percent expecting rates to stay flat and 38 percent predicting an increase.

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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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