Mortgage rates should stay low for the next few months, but they won't decrease much further

Mortgage rates should stay low for the next few months, but they won't decrease much further

June 1, 2021

Mortgage rates plummeted in spring 2020 in response to COVID-19, and they’ve stayed relatively low ever since.

Rates tend to be low when the economy is struggling. The pandemic caused millions of Americans to lose work, and over a year later, the country hasn’t fully recovered.

Since the economy is still grappling with the effects of the coronavirus, will mortgage rates drop again and go even lower? Probably not.

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Rates won’t significantly decrease anytime soon

Mortgage rates may drop a few basis points from day to day and week to week — but any changes will be minor. We probably won’t see a drastic decrease.

Rates have been at all-time lows this past year. It’s possible that rates could go even lower than they are now someday, but not in the near future.

Why? Because mortgage rates heavily rely on employment and inflation in the US. When employment numbers and inflation improve, mortgage rates increase; when they get worse, mortgage rates decrease.

There have been some recent changes in employment and inflation. The US is gradually adding more jobs, but there wasn’t nearly as much job growth as expected in April. Inflation skyrocketed in April, but the Fed expects that jump to be temporary.

Basically, all the shifts in employment and inflation are short-term changes thus far, so mortgage rates haven’t responded one way or the other. Rates should stay roughly where they are for a few more months, but not get any lower.

If the economy starts to consistently improve, you may see rates rise later this year.

This week’s mortgage rates

Mortgage typeAverage rate todayAverage rate last weekAverage rate last month
15-year fixed2.40%2.48%2.48%
30-year fixed3.29%3.36%3.35%
7/1 ARM4.20%4.12%4.31%
10/1 ARM3.66%3.84%4.0%
30-year FHA2.85%2.86%2.94%
VA mortgage loan2.75%2.75%2.75%

Most mortgage rates have decreased since last Tuesday and this time last month, but the shifts are relatively small.

This week’s refinance rates

Mortgage typeAverage rate todayAverage rate last weekAverage rate last month
15-year fixed2.60%2.66%2.67%
30-year fixed3.64%3.74%3.71%
7/1 ARM4.31%4.34%4.49%
10/1 ARM4.26%4.42%4.74%
30-year FHA2.85%2.85%2.90%
VA mortgage loan2.77%2.77%2.75%

Refinance rates have also gone down since last Tuesday and since May 1. Refinance rates are typically higher than purchase mortgage rates, though.

Mortgage and refinance rates by state

Check the latest rates in your state at the links below. 

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the author

Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, and lending. She is also a Certified Educator in Personal Finance (CEPF). Over her five years of covering personal finance, she has written extensively about ways to navigate loans.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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