Mortgage interest rates kicked off the New Year with a new record low.
The 30-year, fixed-rate mortgage loan declined to an all-time low for the week ending January 7, 2021, according to Freddie Mac's weekly Primary Mortgage Market Survey. Average U.S. mortgage interest rates reached record lows 15 times in 2020.
The 30-year, fixed-rate mortgage loan interest rate averaged 2.65 percent, with an average 0.7 point. It was the lowest rate in Freddie Mac's mortgage survey history, dating back to 1971. The 30-year note averaged 2.67 percent the week before and 3.64 percent during the same week in 2020.
"Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices," Sam Khater, Freddie Mac's Chief Economist, said. "[T]he forces behind the drop in rates have been shifting over the last few months, and rates are poised to rise modestly this year. The combination of rising mortgage rates and increasing home prices will accelerate the decline in affordability and further squeeze potential home buyers during the spring home sales season."
Real estate inventory, which steadily declined for years before the pandemic, has plummeted over the past nine months or so in the Greater Boston area. More home listings in 2021 are the cure for skyrocketing home prices.
The number of single-family homes for sale in Massachusetts fell 58.9 percent in November to 5,415 compared to 13,186 houses in November 2019. November had the fewest single-family homes for sale for any November since the Massachusetts Association of Realtors (MAR) began collecting inventory data in 2004.
Condominium inventory also declined, decreasing 15.9 percent to 3,962 units on the market compared to 4,714 in November 2019. November 2020 also had the fewest condos for sale for any November.
The 15-year, fixed-rate mortgage loan averaged 2.16 percent, with an average 0.6 point. The 15-year note, a popular choice for homeowners refinancing, averaged 2.17 percent the prior week and 3.07 percent the same week last year.
The five-year, adjustable-rate mortgage (ARM) loan averaged 2.75 percent, with an average 0.3 point, up from 2.71 percent the previous week. The five-year ARM averaged 3.30 percent during the same week in 2020.
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