After last week’s spike, mortgage rates dropped back to near historic lows, as broader worries about the pandemic and the economy came back to the fore for investors.
The 30-year fixed-rate mortgage was down 2 basis points for the week ended Jan. 21 compared with the previous week, according to Freddie Mac. On a comparative basis, while the 10-year Treasury the week flat, at one point it was over 4 basis points higher.
“We’re now seeing rates fluctuate a bit as political and economic factors drive Treasury yields higher,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “However, we forecast rates to remain relatively low this year as the Federal Reserve keeps interest rates anchored near zero for a longer period of time, if needed until the economy rebounds.”
The upward momentum for mortgage rates has dissipated and there are no fears of an extended period of increases, at least for now, said Matthew Speakman, a Zillow economist, in his weekly commentary on that company’s rate tracker. This week’s decline in rates — as measured by Zillow, which reports offers made through its site — erased half of the recent increase.
“Absent significant disappointments in key economic data, pandemic-related developments, or disruptions in the plans for additional fiscal relief spending, it’s unlikely that mortgage rates will trend much lower,” Speakman said. “But the ongoing uncertainty in all three of those areas has also held rates in check and will likely prevent them from heading significantly higher anytime soon.”
The 30-year fixed-rate mortgage averaged 2.77% for the week ending Jan. 21,
The 15-year fixed-rate mortgage averaged 2.21%, down from last week when it averaged 2.23%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.04%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.8% with an average 0.4 point, down from last week when it averaged 3.12%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.28%.
