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Market Update Mortgage Rates at Pre-COVID Highs
2 minute read
February 3, 2022

30-year and 20-year fixed mortgage rates are holding steady again after climbing throughout January, while 15-year and 10-year rates have dropped.

At the start of the week of Jan. 31, rates were at 3.63 percent for 30-year mortgages and 3.25 percent for 20-year mortgages.

Meanwhile, 15-year fixed rates fell to 2.75 percent, down from 2.88 percent, and 10-year rates dipped to 2.63 percent from 2.88 percent.

These rates offer another opportunity window for buyers ahead of expected rate increases, experts say, especially as the Federal Reserve prepares to make its first interest rate increases in the coming months.

The current rates are most favorable for those seeking a shorter repayment term, although the monthly repayments are likely to be larger than with a longer term.

30-year fixed rates have been below 3.75 percent for around two weeks, despite consistent raises prior to the recent peak.

Experts attribute this holding pattern to a natural, brief lull between the early reaction to the Fed’s announcements, which caused rates to rocket at the start of January, and waiting for these actions to come to fruition.

CoreLogic’s Home Price Index posted that home price appreciation averaged 15 percent year over year for the full year of 2021, up from 6% in 2020.

Its price forecast for this year expects appreciation to exceed 10 percent for the first months of the year before falling to 3.5 percent by December.

The annual increases are expected to average 9.6 percent.

Despite the expectation of rising rates in the months to come, CoreLogic’s report doesn’t anticipate a nationwide price decline.

CoreLogic’s chief economist, Dr. Frank Nothaft, attributed the prices to “a perfect storm of supply and demand pressures.”

Much like other market experts, Dr. Nothaft expects new home building and rising rates to gradually relieve the rapid speed of home price acceleration, rather than cause prices to drop significantly.

As a result, market experts encourage those interested in purchasing a home or refinancing their current mortgage to call up their lender.

Experts are predicting the Fed will make its first rate increase as soon as March, which means mortgage rates are likely to fluctuate in response.

While rates are holding steady and occasionally dipping, experts recommend taking any last-minute opportunities to purchase or refinance so borrowers don’t lose the chance to snag a notable amount of savings.

The Fed’s rate increases don’t directly cause mortgage rates to rise, but mortgage rates are indirectly affected by these actions.

These actions include the Fed’s purchasing of mortgage-backed securities, which also is expected to end by March.

Photo by Ketut Subiyanto from Pexels

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.