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Many Borrowers Miss Boat As Home-Loan Rates Inch Above 3%

The bargain-rate mortgage boat may have hoisted anchor, leaving would-be home buyers and families seeking to refinance stranded on the shore.

On March 4th, the interest rate on benchmark 30-year fixed home loans rose to 3.02% nationwide, reported Freddie Mac’s Primary Mortgage Market Survey. That effectively closes the porthole for borrowers hoping to lock in a record-low mortgage rate in the 2%-range.

“Since reaching a low point in January, mortgage rates have risen by more than 30 basis points, and the impact on purchase demand has been noticeable,” noted Sam Khater, Freddie Mac’s chief economist. “While purchase activity remains high, it has cooled off over the last few weeks and is currently on par with early March, 2020, prior to the pandemic.”

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. With home-loan rates setting new record lows for an amazing 16 times in 2020, thousands of first-time home buyers likely have smiles on their faces.

On December 31, 2020, lenders nationwide were charging an average of 2.17% on 15-year-fixed loans. At the end of December, 2019, the 30-year fixed mortgage rates averaged 3.72%, while 15-year fixed loans averaged 3.16%.

On March 4th, 30-year fixed loans averaged 3.02% nationwide, up from 2.97% a week earlier. A year ago, 30-year fixed mortgages averaged 3.29% Meanwhile, 15-year fixed home loans averaged 2.34%, unchanged from a week earlier. A year ago, the 15-year fixed mortgage averaged 2.79%.

On March 5th, Gateway Capital Mortgage in Chicago was quoting 2.877% on 30-year loans and 2.375% on 15-year mortgages, reported

The Freddie Mac survey is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.

Khater predicted that the rise in mortgage rates over the next couple of months is “likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”

Analysts said long-term mortgage rates are creeping higher because of rising interest rates on 10-year Treasury notes, which have recently skyrocketed to 1.5% from a shockingly low 0.54% during the depths of the pandemic.

Optimism about future economic growth, success of the COVID-19 vaccine, and worries about a rise in inflation after the federal government pumps another $1.9 trillion in stimulus funds into the economy also are pushing bond rates higher, experts say.

Federal Reserve Chairman Jerome Powell said he expects inflation to pick up in the coming months, but he did not expect that to alter the Fed’s record-low interest rate policies unless there is a full recovery in the nation’s job market.

Millions of American families took advantage of the record low rates in the fourth quarter of 2020, according to the U.S. Residential Property Mortgage Origination Report.

Some 3.51 million home and 2-to-4-flat apartment mortgages were originated in the quarter, up 48% from the fourth quarter of 2019. A total of 2.23 million of the loans valued at $666.8 billion were rolled over in refinance action.

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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