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Key 30-year mortgage rate falls again, opening refinance window wider

Bankrate logo Bankrate 3 days ago Jeff Ostrowski
a view of a city: suburban homes © Jupiterimages/The Image Bank/Getty Images suburban homes

Mortgage rates are still falling, a result of a new round of uncertainty about the U.S. economy’s recovery from the COVID-19 pandemic. The average rate on 30-year mortgages fell this week to 3.04 percent from last week’s 3.11 percent, according to Bankrate’s weekly survey of large lenders.

The 30-year fixed mortgages in this week’s survey had an average total of 0.33 discount and origination points.

  • The 15-year fixed-rate mortgage fell to 2.38 percent from 2.43 percent.
  • The 5/1 adjustable-rate mortgage rose to 3.5 percent from 3.25 percent.
  • The 30-year fixed-rate jumbo mortgage fell to 3.24 percent from 3.27 percent.

At the current 30-year fixed rate, you’ll pay $423.76 each month for every $100,000 you borrow, down from $427.56 last week.

At the current 15-year fixed rate, you’ll pay $661.16 each month for every $100,000 you borrow, up from $663.50 last week.

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Where mortgage rates are headed

Mortgage experts expect rates to keep falling. In Bankrate’s survey this week (July 22-28), 67 percent said rates will fall in the coming week. Just 22 percent say rates will stay the same, and 11 percent predicted rates will rise.

“A declining stock market, foreign demand for U.S. debt, and the need for portfolio rebalancing by institutional players have all come together to bid up the price of 10-year Treasurys. This increased demand has pushed down 10-year yields significantly to levels that no one anticipated,” says Ken H. Johnson, a housing economist at Florida Atlantic University. “Long and the short of it, 30-year fixed rate mortgages should decline noticeably this week.”

Few things about the post-COVID economy have turned out quite as expected. The mortgage market continues to defy predictions that rates will start a slow-but-sure climb.

“New concerns about the COVID variant globally have also raised concerns of continued growth being slower than expected, so a return to the lows for the year are quite possible in the weeks ahead,” says Gordon Miller, owner of Miller Lending Group in Cary, North Carolina.

Refinances are a great deal with rates this low

Rates are a cut above the record lows reached earlier this year, but refinancing remains a historically excellent deal. While the rate on 10-year bonds issued by the U.S. government had hovered around 1.5 percent in the spring, it was down to the 1.3 percent range in recent days. The 10-year Treasury is closely tied to 30-year mortgage rates.

Despite the week-to-week ebbs and flows, economists generally expect rates to rise by the end of 2021. As mortgage rates make a predicted slow climb to the 3.5 percent range by year's end, decreased purchasing power might ease some of the pressure on home prices as marginal buyers are pushed out of the market, but competition will still be intense among those who can still afford to buy. Those looking to refinance should be able to find good deals for the rest of the year, though at rates at bit higher than the current level.

The bottom line: If you see a rate that fits your needs and budget, it may be time to do that refinance now.

The national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We've conducted this survey in the same manner for more than 30 years, and because it's consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac's weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. "Lenders surveyed each week are a mix of lender types - thrifts, credit unions, commercial banks and mortgage lending companies - is roughly proportional to the level of mortgage business that each type commands nationwide," according to Freddie Mac.

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