Mortgage Rate Watch: Well, It Was a Good Run

Mortgage Rate Watch: Farewell, 3 Percent

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Updated on October 6th, 2020

It was fun while it lasted. This week, rates on a 30-year fixed mortgage topped 4 percent for the first time since July.
Rates averaged 4.01 percent, according to Freddie Mac’s benchmark survey, up from 3.96 percent last week. At this time last year, 30-year, fixed-rate loans averaged 3.87 percent.
Rates have had nowhere to go but up for a very long time, and they’ll probably continue to rise. A gradual increase shouldn’t have a serious impact on the housing market, though it could affect house hunters struggling with affordability, such as lower-income and first-time buyers.

And don’t blame this week’s rate increase on the Fed. Yes, Chair Janet Yellen and her crew raised short-term borrowing costs earlier this month, but mortgage rates are affected by a lot of things, including global events that have nothing to do with the housing market. In this case, rates rose because of a jump in consumer confidence, according to Freddie chief economist Sean Becketti.
Like us, Becketti expects rates to rise slowly. By this time next year, a mortgage will cost 4.7 percent, according to his forecast. That’s still low. Remember this chart:

Mortgage rates
Source: Freddie Mac

Lorraine.Woellert@Redfin.com

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Lorraine Woellert

Lorraine is enjoying her first real job after a career in journalism. She’s based in Washington, D.C., where she writes about housing and the economy. Before joining Redfin, Lorraine was at Bloomberg News reporting on politics, financial mayhem, housing and the economy. Her dream home is a top-floor loft with a pool, friendly neighbors and a terrace for throwing parties. Everyone's invited. Redfin is a full-service real estate brokerage that uses modern technology to make clients smarter and faster. For more information about working with a Redfin real estate agent to buy or sell a home, visit our "Why Redfin?," page.

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