According to an article in Inman News by Patrick Kearns today, January 7th; despite predictions that mortgage rates would slowly tick back up in 2021, the new year opened this week with the same old story: mortgage rates hitting a new record low.
The average rate for the 30-year fixed-rate mortgage fell to 2.65 percent for the week ending January 7, the lowest number ever recorded by Freddie Mac since the government-sponsored enterprise began tracking weekly rate fluctuations in 1971.
But despite the drop, housing affordability has continued to decrease.
“A new year, a new record low mortgage rate,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices.”
The forces behind plummeting rates are also starting to shift, according to Khater, so economists shouldn’t abandon the position that rates will climb in 2021 after one contrary week.