Mortgage rates in 2020 experienced record low after record low throughout the year. The early weeks of 2021, however, have seen rates begin to tick up a bit. This slight increase in rate resulted in mortgage demand for refinances to increase by 20% last week versus the previous week. According to the Mortgage Bankers Association’s (MBA) seasonally-adjusted index, this was the highest level since last March, with overall volume 93% higher than a year ago. In addition to refinance volume, purchase applications rose 8% for the week, with overall volume 10% higher than a year ago.
On the flipside, although rates have ticked up recently, Federal Reserve Chairman Jerome Powell announced his commitment to keeping rates low for the foreseeable future. In a Q&A session presented by Princeton University, Powell stated, “When the time comes to raise interest rates, we’ll certainly do that, and that time, by the way, is no time soon.” Despite the slight uptick in rates, it appears we will continue to experience the same ultra-low interest rate environment that existed all of 2020, through the early part of 2021.