How Is COVID-19 Impacting Mortgage Rate Trends?

Mortgage rates have been on the decline for months—but that trend may soon be coming to halt. 

Freddie Mac recently released its Primary Mortgage Market Survey, or PMMS, which found that the 30-year fixed-rate mortgage increased slightly from last week.

According to Freddie Mac, the PMMS is “focused on conventional, conforming, fully-amortizing home purchase loans for borrowers who put 20% of the home cost down and have excellent credit.”

The Primary Mortgage Market Survey shows that the latest 30-year fixed-rate mortgage averaged at 2.84%, up from 2.78% last week. However, this new average rate is still notably lower than it was during the same week in 2019, which was 3.75%.

The 15-year fixed-rate mortgage also rose slightly to 2.34% compared to last week when it averaged 2.32%. Again, this is still lower than the 15-year fixed-rate mortgage was at the same time last year when it averaged 3.20%.

As for the 5-year Treasury-indexed hybrid adjustable-rate mortgage, the survey reports that its new average is 3.11%, yet another increase from the week before when it averaged 2.89%. During the same week in 2019, 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.44%.

“Mortgage rates jumped this week as a result of positive news about a COVID-19 vaccine,” Sam Khater, Freddie Mac’s Chief Economist said. “Despite this rise, mortgage rates remain about a percentage point below a year ago and the low rate environment is supportive of both purchase and refinance demand.”

Since mortgage rates are still quite low in comparison to what they were last year, this will likely continue to draw homebuyers into the market over the next few weeks.

“Heading into late fall, the housing market continues to grow and buttress the economy,” Khater added.