Mortgage Rates Drop Even Further

Mortgage Rates Drop Even Further

The new year got off to a good start for home buyers looking for a mortgage. As of January 7, the average rate for 30-year mortgages was just 2.65%, a remarkable low, and the average rate for 15-year mortgages fell to 2.16%, according to Freddie Mac. *

A year ago, the average 30-year mortgage rate was more than a full percent higher, at 3.72%. Even a few months ago rates were higher than now, with the average 30-year rate in mid-October at 2.81% and the 15-year rate at 2.35%.

Exceptionally low mortgage rates will continue to act as an incentive for home buyers, some of whom were left out of the 2020 market because they couldn’t find a home to buy. The lower rates—resulting in lower monthly payments—should provide some counterbalance to higher home prices, pushed up during 2020 by low supply.

*Freddie Mac plays an important role in increasing liquidity and stability in the housing market. It purchases mortgages from lenders, providing cash for lenders to make additional loans to home buyers.

Interest rate data from Freddie Mac as of January 7, 2021.

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