The 30-year fixed-rate mortgage came off its recent all-time lows to average near 3% last week. The 10-year Treasury yield, which mortgage rates closely follow, hit its highest level in the past year, prompting the increase in rates.
“As the economic recovery progresses, mortgage rates are expected to rise further in the upcoming months,” writes Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, for the association’s Economists’ Outlook blog. “Nevertheless, the upcoming rise in mortgage rates should not be alarming to would-be home buyers. The Federal Reserve recently assured that it would keep interest rates unchanged for a long time.”
Rates continue to remain near historic lows, said Sam Khater, Freddie Mac’s chief economist. The all-time low for the 30-year fixed-rate mortgage was set in January, averaging 2.65%.
Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 25:
30-year fixed-rate mortgages: averaged 2.97%, with an average 0.6 point, up from last week’s 2.81% average. Last year at this time, 30-year rates averaged 3.45%.
15-year fixed-rate mortgages: averaged 2.34%, with an average 0.6 point, rising from last week’s 2.21% average. A year ago, 15-year rates averaged 2.95%.
5-year hybrid adjustable-rate mortgages: averaged 2.99%, with an average 0.1 point, rising from last week’s 2.77% average. A year ago, 5-year ARMs averaged 3.20%.
Freddie Mac reports average points along with average commitment rates to better reflect the total upfront cost of obtaining the mortgage.
Source: Freddie Mac and "Instant Reaction: Mortgage Rates, February 25, 2021," National Association of REALTORS® Economists’ Outlook blog (Feb. 25, 2021)