For the first time in nearly three years, mortgage rates have fallen back to more than 3 percent. After an unprecedented climb of nearly a percentage point in a matter of weeks, mortgage rates have finally dipped back to where they were before the pandemic began.
The average rate for a 30-year fixed mortgage was 3.28 percent as of mid May 2021, according to the most recent data from Freddie Mac. That is down from 3.45 percent the week before, and the lowest rate ever recorded since the survey began in 1971.
This is encouraging news for potential homebuyers who had become discouraged due to rising mortgage rates since the start of the pandemic. This could provide an extra spark for the housing market, which has been strong this year as mortgage rates remained relatively low.
Indeed, refinances and purchase originations have been increasing since January 2021, according to the Mortgage Bankers Association. The numbers, however, slowed down this past month, as buyers paused to see whether rates would continue to climb or not.
It’s important to note, however, that the current dip in mortgage rates is a temporary one. While rates could remain low for the next few weeks, they’re expected to begin climbing again this summer.
But even then, mortgage rates should remain in the mid- to high-3 percent range, which is still below where they were pre-pandemic. That could give buyers the chance to buy sooner rather than later, before the rates start to inch back up.
In the end, the small decrease in mortgage rates means that borrowers should still be able to secure attractive terms on their homes. While rates are likely to rise again by the end of the summer, the current low rates could be on the table for those ready to make a move sooner than later.
Mortgage Rates Plunge from Rapid Climb
