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Thursday's Best Mortgage Rates: January 21 logo 1/21/2021 Leslie Cook
diagram: Mortgage-Rate-015 © Money; Getty Images Mortgage-Rate-015

Builder confidence in the housing market slipped in January amid concerns over material costs, labor shortages, and the resurgence of COVID-19. Despite the decline, builder sentiment remains positive overall.

Meanwhile, mortgage rates ticked down slightly.

Today’s Mortgage Rates

The average interest rate on a 30-year fixed-rate mortgage was 3.132% on Wednesday — up from 3.133% a day earlier.

Mortgage Rate Chart
Loan type Average Rate
30-Year Fixed Loan 3.132%
15-Year Fixed Loan 2.346%
30-Year FHA Loan 2.892%
30-Year VA Loan 2.924%
30-Year Jumbo Loan 3.638%
Source: Money | Date: Jan. 20, 2021 | Rates assume a credit score of 700

Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the previous day. They reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. The rates assume a 20% down payment and include discount points.

Freddie Mac’s benchmark Primary Mortgage Market Survey put mortgage rates at 2.79% with 0.7 points paid for the week ending January 14. That’s a significant jump of 0.14 percentage points compared to last week’s new all-time low of 2.65%. The mortgage purchaser’s weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.

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View Rates for January 21, 2021

How do I get the best mortgage rates?

Mortgage rates vary from state-to-state. On Wednesday, borrowers in Illinois were quoted the lowest mortgage rates — at 3.078%. People looking for mortgages in Nevada saw the highest average rate at 3.194%.

Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.923%, while those with credit of 620 or below were shown rates of 4.19%.

You may be able to negotiate a better interest rate if you shop around or if you have other accounts with the lender. (To get started, take a look at Money’s picks for the best mortgage lenders.) Currently, some lenders are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.

Today’s Mortgage Refinance Rates

Money’s survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.208% on Wednesday. In January 2020, the average mortgage rate (including fees) was around 3.8%.

Mortgage Refinance Rate Chart
Loan type Average Rate
30-Year Fixed Loan 3.208%
15-Year Fixed Loan 2.605%
30-Year FHA Loan 3.371%
30-Year VA Loan 3.398%
30-Year Jumbo Loan 3.609%
Source: Money | Date: Jan. 20, 2021 | Rates assume a credit score of 740

What else is happening in the housing market today?

Rising material costs and a shortage of available land has shaken builder confidence in the housing market. According to the National Association of Home Builders/Wells Fargo Housing Market Index for January, builder confidence in the market for newly-built single-family homes dropped to a reading of 83. Despite the drop, builders still view conditions as very favorable over the next few months.

The decrease comes just two months after the index reached an all-time high of 90 for November. Since then, homebuyer demand has remained strong, especially as interest rates dropped to several new historic lows at the end of the year. As a result, inventory has also reached new lows and builders are struggling to meet demand.

“While housing continues to help lead the economy forward, limited inventory is constraining more robust growth,” said Robret Dietz, chief economist for NAHB. “A shortage of buildable lots is making it difficult to meet strong demand and rising material prices are far outpacing increases in home prices, which in turn is harming housing affordability.”

Chuck Fowke, chairman of NAHB, noted that builders are also facing a labor shortage, leading to delays in construction and finished home delivery times. As a consequence, the lack of inventory continues to put upward pressure on home prices.

The HMI surveys builder sentiment on three main components: current sales of newly-built single-family homes, the expectations of sales over the next six months, and the traffic volume of prospective buyers. Any reading over 50 means that builders view market conditions over the next six months as being more on the “good” side than “bad.”

Mortgage Tip of the Week

Buying a home can be daunting. Follow these expert tips to make the process easier.

Emanuel Santa- Donato, senior director of Capital Markets at, on setting a budget and sticking to it.

Homeownership is one of the most financially impactful and empowering things you can do and you want to ensure you set yourself up for success. Many homeowners get swayed into spending above their budgets, which leads to larger issues later on. Determine the ‘all-in’ amount you can spend on housing, including the mortgage payment, taxes, insurance, maintenance, utilities, and other related expenses.”

Bottom line:

Qualifying for a Mortgage Is Surprisingly Difficult Right Now

A Key Indicator Suggests Mortgage Rates’ Epic Decline May Soon End

As Prices Soar, 6 Tricks for Finding a House You Can Actually Afford

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