Mortgage rates hit new record lows as 2021 commenced, with the average rate for a 30-year, fixed-rate mortgage dropping to 2.65%, down from 2.67% last week, according to Freddie Mac’s Primary Mortgage Market Survey.
A year ago at this time, the average rate for a 30-year was 3.64%.
“A new year, a new record low mortgage rate,” says Sam Khater, chief economist for Freddie Mac, in a statement. “Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices.
“However, the forces behind the drop in rates have been shifting over the last few months and rates are poised to rise modestly this year,” Kahn adds. “The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season.”
For the week ended January 7, the average rate for a 15-year fixed-rate mortgage was 2.16%, down slightly from 2.17% the previous week and down from 3.07% a year ago.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 2.75%, down from 2.71% last week and down from 3.30% a year ago.
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