As we head into 2021, mortgage rates stay historically low. We’ve been talking about these mortgage rates for the last few years but in 2020 and at the start of 2021, they have dropped even lower. Real estate has definitely dominated the headlines with foreclosure moratoriums, forbearance programs, and the endless feed of mortgage interest rates. But on the very last day of 2020, Freddie Mac shows mortgage interest rates increased just barely to 2.67, only one point from the week before. One year ago, rates were 3.72% for a 30 year, fixed-rate mortgage and they have fallen even more than one full percentage point in just 12 months. [Source]
Even a 15-year loan decreased over the past week down to 2.17% from the previous low of 2.19%. This means that on a $270,000 mortgage for 15 years the monthly payment would be about $1760, not including taxes and insurance. This naturally means that refinance applications are up, even during the holiday slowdown. Refinance applications increased 4% compared to just the week before the holidays, a full 126% higher than last year.
Right before Christmas, purchase applications dipped just 1%, which is the second time in the past three weeks the number of applications has declined, but given that it’s the holidays, this is understandable. Now that we are heading into 2021, those new purchase applications are expected to increase.
We said for the last few months that these are the lowest rates on record and as a new administration comes in the office, the vaccine starts to make its way to the population we will see more consumer confidence return to the US real estate market. Even if rates start to reverse course, it will be a slow climb. Demand is strong and we can expect to see home prices quickly rise in advance of the spring homebuying season. Buyers naturally have more buying power and there may not be enough homes to fill the demand.
In the St. George real estate market there are plenty of new communities popping up such as Desert Color, Arroyo, and Fish Rock, just to name a few. There are currently about to 18 new communities in St. George perfect for new home builders, buyers, and move-up buyers. For more information on current home values, prices, and mortgage rates, contact me below at any time. Let’s take a look at your buying power and if you’re looking at buying a new home in St. George or refinancing your current one.