After sharp move, mortgage rates retreat a bit

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Mortgage rates pulled back a bit this week, a move that gives homeowners some time to refinance.

The average cost of a 30-year fixed-rate mortgage fell to 3.16 percent from last week’s 3.18 percent, according to Bankrate’s national survey of lenders. Rates set a record low of 2.93 percent last month. The 15-year fixed also retreated, edging d0wn to 2.49 percent from last week’s 2.52 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 0.29 discount and origination points.


Homeowners who have been considering a refinance should pull the trigger now, says Greg McBride, Bankrate’s chief financial analyst.

“If you’ve been procrastinating on refinancing, wait no longer,” McBride says. “Every bit that mortgage rates move up takes away some of your potential savings.”

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 strongly 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, the logic goes, a generous stimulus bill will follow.

“We are no longer in a recession,” says Logan Mohtashami, housing analyst at HousingWire.

Nearly half of mortgage experts polled by Bankrate expect rates to rise in the coming week. Some say massive stimulus could create inflationary pressures that would force rates higher.

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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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