Mortgage rates have risen slightly, but the Refi window is still open

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Mortgage rates rose slightly this week, reminding homeowners of the urgency to refinance their home loans before rates start to rise more sharply.

The average cost of a 30-year fixed-rate mortgage rose to 3.19 percent from 3.16 percent last week, according to the Bankrate National Survey of Lenders. In January, rates hit a record low of 2.93 percent. The 15-year fixed rate mortgage remained unchanged at 2.47 percent.

The bank rate includes points of issue and other commissions. The 30-year fixed rate loans included in this week’s survey averaged 0.3 points of discount and disbursement.

Rates remain historically low, allowing millions of American homeowners who can still benefit from refinancing.

“The most important thing most households can do to take advantage of low interest rates is homeowners refinancing their mortgages,” said Greg McBride, chief financial analyst at Bankrate. “Significant reductions in monthly payments can create a way to speed up debt payments or respite to increase savings.”

Mortgage rates fell sharply after the coronavirus-driven recession in spring 2020, a trend that has fueled a surprisingly strong housing market. An upward trend in mortgage rates reflects signals about changes in the economy.

Although rates have risen from record lows, many homeowners are just now refinancing, said Bill Dallas, president of America Mortgage finance. The delay is understandable – most Americans just felt too nervous during last year’s recession to worry about refinancing.

“There were many other issues that people focused on – COVID, their work, their family,” says Dallas. “Refinancing was probably there, in third or fourth place. If your job is more sustainable, you have more opportunities to focus on refinancing, compared to last year, when everyone was in a panic. “

Meanwhile, home prices rose sharply during the pandemic, and low mortgage rates helped drive up the value of homes. For home buyers, especially first-time buyers, rising prices pose an affordability problem.

On the one hand, rates can resume growth: 10-Year Treasury Bond Yield, a key indicator of mortgage rates, has more than doubled in recent months. When Democrats take control of the White House and Congress, a generous incentive law was passed – and additional government spending may be required.

Mortgage experts interviewed by Bankrate are divided over how rates will go for the coming week: 50 percent expect rates to stay the same, 20 percent predict a drop, and 30 percent say they will rise again.

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