Should We Expect the Rise of Mortgage Rates in 2021?
Not to keep you in the dark more longer, it is very likely that rates will rise in the second half of 2021.
According to Realtor.com portal, in a long-term view mortgage rates in 2021 will be higher. And that’s why it is very likely will happen.
Long-term indicator of mortgage rates are Treasury bond rates. In August 2020 the 10-year Treasury yield hit the bottom and climbed back to 1.7% only in March 2021. So how these factors interact with each other? During the pandemic crisis, bond yields have been rising and mortgage rates have been coming down, but improvement of economic situation in 2021 will very likely lead to rise of long-term bond yields and, expectantly, it will drive mortgage rates higher.
Another important factor that cannot be excluded when assessing the possibility of mortgage rates rising this year — is a COVID-19 situation all over the country. Economists believe that unexpected bad news surrounding COVID-19 or the process of vaccine distribution can prevent increase of mortgage rates. And we should not forget about stock market impact on rates either.
So If you’re considering a mortgage refinance this spring you may not want to wait long, as there are a lot of experts who assume rates to rise in the second half of 2021. Although getting a mortgage this spring and securing the lowest possible mortgage rates may still require some patience. While the surge in refinancing applications has slowed compared to 2020, it still is exceptionally high.