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Experts: Mortgage Rates Have Probably Hit Bottom

At 2.65%, the average 30-year, FRM hit its 17th record low in less than a year. But experts predict an increase soon as the “forces behind the drop” shift.

WASHINGTON – On Jan. 7, Freddie Mac reported that the average 30-year fixed mortgage rate fell to 2.65% – the 17th historic low in less than a year. The new record low is down from 2.67% a week earlier and 3.64% a year ago.

The average 15-year fixed mortgage rate also slipped to 2.16% from 2.17% a week ago and 3.07% a year ago, though the average five-year adjustable mortgage rate edged up to 2.75% from 2.71% a week ago, down from 3.3% a year ago.

“A new year, a new record low mortgage rate,” says Freddie Mac chief economist Sam Khater.

However, Khater thinks the 2.65% might be at least one of the last times mortgage rates set a record before moving higher.

“The forces behind the drop in rates have been shifting over the last few months, and rates are poised to rise modestly this year,” he says. “The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential homebuyers during the spring home sales season.”

Source: Washington Post (01/07/21) Orton, Kathy

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