Hi Friends,

Mortgage interest rates continue to be near the all-time low levels we have continued to experience since June of 2020. Mortgage rates are still at historically low levels despite the FHFA (Federal Housing Finance Administration) refinance fee hike that by now has been implemented by all lenders. The bond market has been able to weather the pull of investor funds flowing into the torrid stock market. With the continued help of the Federal Reserve, purchasing $100 Billion+ worth of bonds and treasuries per month, bond yields that most influence mortgage rates remain at very low levels.

Mortgage rates touched the bottom again to start the New Year with the 30-year bond yield hitting historically low levels again on 1/4/2021. The day after touching these low yield levels, mortgage rates began rising until they had gone up .25% heading into the 2nd week of January and then came back down again, due to a larger than normal demand in 10-year and 30-year treasury bonds. The yield on the 10-year treasury bond floated above 1%, which spurred the increased buying in the bond market and helped put a lid on rising mortgage rates. We will see mortgage rates rise and fall on the interplay between stocks and bonds but, overall, mortgage rates continue to remain low with the continued support of the Federal Reserve.

The Federal Reserve has continued to promise low interest rates for the next few years. Mortgage rates will likely continue to be at or near these historically low levels through 2021. A lot hinges on the covid vaccine and our economy getting back on track.

As always, your mortgage guy,
Viral (Vic) Joshi

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