Home buyers have another shot at snagging mortgage rates under 3% this week. The 30-year fixed-rate mortgage fell to 2.99%, defying expectations that below 3% rates were now gone.

The Federal Reserve recently warned that it will soon begin tapering its bond purchases, which is expected to move rates up. The National Association of REALTORS® is predicting that the 30-year fixed-rate mortgage will average 3.5% by mid-2022.

But over recent weeks, mortgage rates have remained just above or just below 3%.

“Mortgage rates continue to hover at around 3% again this week due to rising economic and financial market uncertainties,” says Sam Khater, Freddie Mac’s chief economist. “Unfortunately, with the expectation that both mortgage rates and home prices will continue to rise, competition remains high and housing affordability is declining.”

Still, Nadia Evangelou, NAR’s senior economist and director of forecasting, writes on the association’s blog that even if mortgage rates do climb to 3.5%, that is still a historical low. Demand for housing is expected to remain robust. NAR is forecasting about 6 million existing homes to be sold in 2022, about the same as last year.

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 6:

• 30-year fixed-rate mortgages: averaged 2.99%, with an average 0.7 point, falling from last week’s 3.01% average. Last year at this time, 30-year rates averaged 2.87%.
• 15-year fixed-rate mortgages: averaged 2.23%, with an average 0.7 point, dropping from last week’s 2.28% average. A year ago, 15-year rates averaged 2.37%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.52%, with an average 0.3 point, rising from last week’s 2.48% average. A year ago, 5-year ARMs averaged 2.89%.

Freddie Mac reports average commitment rates along with average points to reflect the total upfront cost of obtaining the mortgage.

Source: Mortgage Rates Unexpectedly Dip Below 3% REALTOR® Magazine (October 8, 2021)