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Did Many Home Buyers Miss The Boat For Bargain-Rate Loans?

The bargain-rate mortgage boat—carrying home loans with rates in the mid-2% range—has officially sailed.

On October 28th, benchmark 30-year fixed home loan average nationwide shot up to 3.14% up from 3.09% a week earlier, reported Freddie Mac’s Primary Mortgage Market Survey. A year ago, the 30-year fixed loans averaged 2.81%.

Meanwhile, the rate on 15-year fixed mortgages rose to an average of 2.37% from 2.33% a week earlier. A year ago, lenders were quoting a rate of 2.32% on 15-year fixed loans.

On July 22nd—only three and a half months ago-would-be home buyers and families seeking to refinance had a chance to lock in a 30-year fixed mortgage at 2.78%. And, 15-year fixed mortgages hit a record-low average of 2.10% nationwide on July 29th.

Thirty-year fixed-mortgage interest rates ended 2020 at a rock-bottom 2.66%—the lowest level in the Freddie Mac survey history, which began in 1971. Home-loan rates set new record lows for an amazing 16 times in 2020, and tens of thousands of homeowners refinanced.

“The yield on the 10-year Treasury note has been trending upward due to the decline in new COVID cases, increasing consumer optimism, as well as broadening inflation and persistent shortages,” said Sam Khater, Freddie Mac’s chief economist.

The Freddie Mac survey is focused on conventional, conforming, fully amortizing home-purchase loans for borrowers who place a 20% down payment and has excellent credit.

Analysts said long-term mortgage rates are creeping higher because of rising interest rates on 10-year Treasury notes, which hit 1.64% in mid-October. The 10-year Treasury-note rate was only 1.26% on July 29th.

By early November, the Federal Reserve is expected to announce a timetable for reducing its monthly bond purchases, which have kept mortgage rates at ultra-low levels for much of the past 18 months.

A recent forecast by the Mortgage Bankers Association projects 30-year fixed home-loan rates to rise to 4% by the end of 2022. The National Association of Realtors also sees rates moving higher, reaching 3.5% by mid-2022.

“Mortgage rates are rising, but purchase demand remains firm, showing that latent purchase demand exists among consumers,” noted Khater.

Chicago-area borrowers who move quickly still have a chance to lock in the following bargain rates as of October 28th, reports

  • Gateway Capital Mortgage in Chicago was quoting 2.760% on 30-year loans and 2.125% on 15-year mortgages with a 3% down payment and a $595 loan fee.

  • First Savings Bank of Hegewisch was quoting 2.684% on a 30-year loan and 2.1% on a 15-year loan with 20% down payment and a $570 loan fee.

  • Rate Rabbit was quoting 2.790% on a 30-year loan and 1.875% on a 15-year mortgage with 20% down. However, the loan fee is $1,900.

Mortgage-rate history

Archives of the now-defunct Federal Housing Finance Board show long-term mortgage rates in the 1960s were not much higher than the Great Depression, when lenders were charging 5% on five-year balloon loans.

Nearly six decades ago, between 1963 and 1965 you could get a mortgage at 5.81% to 5.94%. Between 1971 and 1977, the now-defunct Illinois Usury Law held rates in the 7.6%-to-9% range.

In the early 1980s, run-away inflation caused home-loan rates to skyrocket over the moon. According to Freddie Mac, benchmark 30-year mortgage rates peaked at a jaw-dropping 18.45% in October of 1981 during that Great Recession.

Rates finally fell below 10% in April of 1986, and then bounced in the 9%-to-10% range during the balance of the 1980s. Twenty-two years ago—in August of 1999—when some of today’s Millennial borrowers were in diapers, lenders were quoting 8.15% on a 30-year fixed mortgage. Back then, that seemed like a good deal.

For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit


“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”


Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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