30-Year Mortgage Rate Inches Down to 2.86% This Week

House on top of stacks of coins on table.

©manusapon kasosod - Getty Images

Mortgage rates followed the trend of the 10-year Treasury yield this week and inched lower. But these historically low rates—averaging 2.86% this week for the 30-year fixed-rate mortgage—are expected to rise over the course of the next few months.

The National Association of REALTORS® predicts that mortgage rates will rise to 3.5% by mid-2022 as the Fed will likely start reducing its bond purchases before the end of the year. Expect interest rates to rise in the middle part of next year, Nadia Evangelou, NAR’s director of forecasting, said on the association’s Economists’ Outlook blog.

But for now, the 30-year fixed-rate mortgage is mostly in a holding pattern under 3%.

“It’s Groundhog Day for mortgage rates, as they have remained virtually flat for over two months,” said Sam Khater, Freddie Mac’s chief economist. “The holding pattern in rates reflects the markets’ view that the prospects for the economy have dimmed somewhat due to the rebound in new COVID-19 cases. “While our collective attention is on the pandemic, fundamental changes in the economy are occurring, such as increased migration, the extended continuation of remote work, increased use of automation, and the focus on a more energy-efficient and resilient economy. These factors will likely lead to significant investment and new post-pandemic economic models that will spur economic growth.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 16:

  • 30-year fixed-rate mortgages: averaged 2.86%, with an average 0.7 point, down slightly from last week’s 2.88% average. Last year at this time, 30-year rates averaged 2.87%.
  • 15-year fixed-rate mortgages: averaged 2.12%, with an average 0.6 point, dropping from last week’s 2.19% average. A year ago, 15-year rates averaged 2.35%.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.51%, with an average 0.1 point, rising from last week’s 2.42% average. A year ago, 5-year ARMs averaged 2.96%.

Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.