When 2021 began interest rates tumbled once more to the lowest they had ever been–down to 2.65%. They spent a few weeks nudging upward, but now they have started to come back down again. After reaching a high of 2.79% mid-January they closed out last week at 2.73%, according to Freddie Mac’s weekly survey.

Those numbers are for a 30-year, fixed rate loan but the 15-year mortgages saw a much smaller step down, only going from 2.21% to 2.20%. Since they don’t have as much room to dip before heading into the dangerous sub-2% territory we can expect them to have smaller degrees of change from one week to the next.

Despite the slight decrease, the overall upward trend has led to a decrease in activity. Purchase applications were 4% lower on a seasonally adjusted basis compared to the week before, per the Mortgage Bankers Association weekly report. This was 16% higher compared to one year ago. Refinances saw a decrease of 5% week-over-week, but were still 83% higher than the same time last year. This past year saw refinances surge, sometimes seeing 100% increases year-over-year, but with signs of rates trending toward an increase and there being a finite number of homeowners who are in a position to refinance we could start to see activity decrease in this segment in the latter part of this year.

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