Mortgage rates rise but remain low in the final days of 2021
SILVER SPRING, Maryland – Average long-term mortgage rates in the United States rose slightly in the last week of 2021.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark, the 30-year home loan, climbed to 3.11% this week from 3.05% last week. A year ago, the 30-year rate stood at 2.67%.
The average rate on 15-year fixed-rate mortgages, popular among those refinancing their homes, rose to 2.33% from 2.3% last week. It was 2.17% a year ago.
Many economists expect rates to rise next year after the Federal Reserve announced earlier this month that it would start cutting back on its monthly bond purchases – which are aimed at lowering rates long term – to combat the acceleration of inflation. But even with the three rate hikes expected next year, the Fed’s benchmark rate would still be below 1%.
Despite historically low interest rates, many potential buyers have missed out due to a low supply of available housing which seems to be getting more expensive day by day. Median home prices are nearly 20% higher than a year ago, with no sign of relief for frustrated house hunters looking for more space since the pandemic erupted nearly two years.
In addition to lack of supply and skyrocketing prices, virus supply chain outages are forcing builders to delay projects and struggle to meet demand.