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Rate Update: How Long Will the Record-Low Interest Rates Last?

As we transition into the fall real estate season, let’s look at how the interest rates—namely on the ever-popular 30-year fixed-rate mortgage—have been trending. Also, let’s look into our crystal ball and see if we can shed some light on the short-term future of the interest rates.

The Summer Interest Rates: For the 30-year fixed-rate mortgage, the average rate between the beginning of June and the end of August was 2.89 percent, according to Freddie Mac’s weekly Primary Mortgage Market Survey. This figure is slightly lower than the 3.04 percent average for the same time period in 2020 and is well below the 3.72 percent mark for the same three months in 2019. Overall, the 2.89 percent was the lowest for any summer season since Freddie Mac began tracking interest rates in 1972.

Current Rates: More recently, the interest rates have been fairly steady. Although Freddie Mac did report slightly higher rates during the last week of September (3.01 percent on September 30), the average weekly rate on the 30-year fixed-rate mortgage between July 22 and September 23 was 2.84 percent. During this time, the weekly high was 2.88 percent on September 9 and the weekly low was 2.77 percent on August 5. For the six-week period from August 12 to September 23, the range was even narrower, with the rates fluctuating only 0.02 percent (2.86-2.88 percent).

Rate Outlook: Although interest rates are influenced by a number of different factors, the outlook for the rates looks to be a push-pull between how the U.S. economy recovers from the pandemic and how the Federal Reserve reacts to that recovery. The Fed recently indicated that it is going to begin to “taper” its efforts to support the economy, which will include changing the amount of long-term bonds that it purchases and a possible hike on the benchmark interest rate (both of which influence mortgage rates), although the pace of the economic recovery will ultimately determine the timing of any action. Translation: Once the economy reaches a certain level of post-pandemic improvement, higher mortgage interest rates may not be far behind.

Urgency to Buy or Refinance? Although higher interest rates are not necessarily on the horizon—especially if we see another resurgence of COVID-19 cases this fall and winter—taking advantage of today’s ultra-low rates may be a good choice for those who have been mulling a new home purchase or a refinance. As we’ve seen repeatedly in the past, rates can spike without warning, so acting sooner rather than later may be the best decision.

As always, keep in mind that the interest rate that you get on your loan will depend on a variety of factors including your credit profile and the type of loan you’re getting. For up-to-date information on the current interest rates, talk to your mortgage professional.


For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.

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