Mortgage Rates Slide Downward After A Few Weeks Of Increases

When 2021 began interest rates tumbled once more to the lowest they had ever been–down to 2.65%. They spent a few weeks nudging upward, but now they have started to come back down again. After reaching a high of 2.79% mid-January they closed out last week at 2.73%, according to Freddie Mac’s weekly survey.

Those numbers are for a 30-year, fixed rate loan but the 15-year mortgages saw a much smaller step down, only going from 2.21% to 2.20%. Since they don’t have as much room to dip before heading into the dangerous sub-2% territory we can expect them to have smaller degrees of change from one week to the next.

Despite the slight decrease, the overall upward trend has led to a decrease in activity. Purchase applications were 4% lower on a seasonally adjusted basis compared to the week before, per the Mortgage Bankers Association weekly report. This was 16% higher compared to one year ago. Refinances saw a decrease of 5% week-over-week, but were still 83% higher than the same time last year. This past year saw refinances surge, sometimes seeing 100% increases year-over-year, but with signs of rates trending toward an increase and there being a finite number of homeowners who are in a position to refinance we could start to see activity decrease in this segment in the latter part of this year.

This post first appeared on Forbes.com. To see the original, click here.