The mortgage rate report for the first week of 2021 gives us some hope!
Mortgage rates have dipped slightly within this first week of the new year. Just within this first week of 2021, mortgage rates have dropped from 3.99 percent to 3.95 percent. This 4-basis point dip is bringing a sense of good news to the 2021 real estate market for anyone looking to buy or re-finance in the near future.
We have also seen a similar decrease for 15-year fixed-rate mortgages, which have demonstrated a 6-basis point dip within the first week, dropping from 3.44 percent to 3.38 percent. But what caused this decrease within the first week of the new year?
According to Freddie Mac Deputy Chief Economist Len Kiefer, “treasury yields fell from a week ago, helping to drive mortgage rates down to start the year.” 30-year fixed mortgages typically drop each year, and this year they dropped a quarter of a percent. Even as short term interest rates may seem to consistently increase, long term interest rates prove to do just the opposite.
Federal Chairwoman Janet Yellen also announced a slight interest rate increase, falling somewhere between 1.25 percent and 1.50 percent, just before the new year. Real estate professionals can predict that this increase in interest rates is a reflection of the United States economy’s confidence in the upcoming fiscal year.
After this first week, everything seems to be looking up for the real estate market, and we are hopeful that it will remain this way for the rest of the year. If the market remains steady, 2021 could be a great year for buyers and realtors alike. Right now, the market is looking like it is as good of a time as any to make some large business transactions. But will the market remain stable like this throughout the entirety of the year? Only time will tell.