Instant Reaction: Mortgage Rates, June 3, 2021

Dated: June 3 2021

Views: 108

Mortgage rates rose this week but remained below 3.00%. Specifically, the 30-year fixed mortgage rate ticked up to 2.99% from 2.95% the previous week. Expect mortgage rates to increase modestly in the following months as the economy continues to recover. NAR forecasts the 30-year fixed mortgage rate to average 3.20% in 2021.

These historically low mortgage rates fuel home buying activity amidst the pandemic and higher unemployment. While June is homeownership month, let's take a look at some facts about homeownership:

In 2019, 78.7 million people owned a home, with about 1 million new homeowners compared to the previous year. While most of these owners bought their home in 2007, these owners have already accumulated about $125,000 in equity due to price appreciation. Nevertheless, these owners may have saved even more if they refinanced their home as mortgage rates are nearly 3.5% lower compared to 2007.

According to the U.S. Census, 3 in 5 homeowners still have to make a mortgage payment every month. In the meantime, remember that a rate lower by 3.5% decreases the monthly payment by $400. Thus, homeownership is definitely the main source of wealth for millions of households.

Although mortgage rates are currently much lower than in 2007, recent and would-be homebuyers need to pay a higher amount for their home loan every month due to record-high home prices. Specifically, while the typical home is nearly 60% more expensive compared to 2007, the monthly mortgage payment for a 30-year fixed rate home loan increases to $1,290 from $1,230 back in 2007. Thus, current low mortgage rates may have dropped the borrowing cost significantly, but rising home prices erode affordability, pricing out some home buyers.

However, due to favorable demographics with nearly 5 million millennials reaching the age that they typically get married, expect activity to remain strong. NAR forecasts existing and new home sales to rise 10% and 20% in 2021, respectively.


Nadia Evangelou

Senior Economist and Director of Forecasting

Nadia Evangelou is Senior Economist and Director of Forecasting for the National Association of REALTORS®.


"Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission."

Blog author image

MaryAnne Dorio

I am originally from Long Island, NY. My husband and I moved to the Myrtle Beach area in 1999. This is home for us, many of our family members have joined us and we all feel like this is the best plac....

Latest Blog Posts

A Pandemic Makeover

See how interior designer Esther Dormer transformed an 80-year-old home in Pittsburgh into a contemporary, luxurious space.Interior designer Esther Dormer sought to give an old space a new life. She

Read More

Instant Reaction, Mortgage Rates, June 17th, 2021

Mortgage rates dropped further this week, although the Fed revised upward their forecast about inflation. Specifically, the 30-year fixed mortgage rate fell to 2.93% from 2.96% the previous week. In

Read More

Hot Home Trend: A Color 'Bomb' of Yellow

Paint firm Pantone chose "Illuminating"—a bright, bold yellow—as one of its 2021 Colors of the Year. Could it become a staging staple?The cheerful color of yellow is lighting up home

Read More

June 2021 YTD Stats

EXIT Coastal Real Estate Pros is proud to announce that as of 6/11/2021 we are in the top 11% of brokerage firms here in Horry and Georgetown counties.We are currently&

Read More