Americans who have purchased new homes or refinanced their mortgages in the past few months may have done so at the right time.
The average rate on a 30-year fixed-rate mortgage rose to 3.02%, mortgage finance giant Freddie Mac said Thursday. This is the first time the rate on America’s most popular mortgage has climbed above 3% since July, and for the fifth straight week it has risen or remained stable.
Mortgage rates have been falling for much of 2020 after COVID-19 pandemic ruined the economy. This helped spark the biggest mortgage boom since the pre-financial crisis, fueled by refinancing. When rates hit 2.98% in July, it was their first time below 3% in about 50 years of record keeping.
Recent upward movements create clear contrast: More vaccinations in the USA and recent progress on the latest coronavirus relief bill improved investor outlook on the economy, a key variable in setting borrowing rates.
Mortgage rates tend to move in the same direction as 10-year Treasury yields, which are rising. Treasury yields rise when investors feel confident enough in the economy to ditch safe assets like bonds in favor of riskier ones, including stocks. Yields hit their highest in a year last week.