"Mortgage rates continued to remain below 2.9% for the last nine straight weeks. Specifically, according to the finance mortgage provider Freddie Mac, the 30-year fixed mortgage rate rose slightly
Instant Reaction: Mortgage Rates, April 29, 2021
Dated: April 29 2021
Mortgage rates rose slightly this week, but they remain below 3%. Freddie Mac reported today that the average rate on the 30-year fixed-rate home loan inched up to 2.98% from 2.97% the previous week. Nevertheless, expect rates to move above 3% in the following weeks as the economy continues to recover.
The National Association of REALTORS® estimates rates to average 3.2% by the end of the year.
The Fed reassured again that they will keep the low interest rate policy since they don't expect the current inflationary pressure to be persistent and they don't see any financial stability concerns from the housing market. Specifically, as more and more consumers take advantage of the ultra-low mortgage rates, newly originated mortgages—including refinances—reached a record high level in 2020, surpassing the volumes during the refinance boom of 2003. However, comparing with 2003, the composition of these mortgage originations in 2020 is significantly different; 71% of originations at the end of 2020 went to borrowers with credit scores over 760, while only 31% of those new mortgages went to the most creditworthy borrowers in 2003.
Meanwhile, the National Association of REATORS® released pending home sales today, which rose by nearly 2% in March from the previous month, reflecting the strong demand for housing. Along with low mortgage rates, favorable demographic trends will likely boost further housing demand in the following months. Remember that 4.6 million millennials—the largest cohort of homebuyers—will be at the typical age that millennials get married in 2022. In addition, 3.2 million more Baby Boomers handed in their resignations at record rates in 2020 compared to 2019. While Baby Boomers typically sell or buy vacation homes when they retire, this increase has many implications for housing and mortgage demand.
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Mortgage rates continued to remain below 2.9% for the last eight straight weeks. Specifically, according to the finance mortgage provider Freddie Mac, the 30-year fixed mortgage rate was unchanged