Rates on the 30-year fixed mortgage, the most popular type of home loan, fell to an average 3.19% from 3.23% the previous business day. The average for the 15-year fixed fell to 2.39% from 2.42% the previous day. Fixed mortgage rates tend to track 10-year Treasury yields, which often rise in tandem with increased inflation fears. Concerns about a new strain of COVID-19 and whether the economy had reached peak growth rates have generally suppressed yields in recent weeks, though they did yo-yo a bit this week. While rates are still higher than the record lows reached this past winter (2.65% for the 30-year and 2.16% for the 15-year, according to Freddie Mac’s measure), they are quite affordable by historic standards. (In the decade leading up to the onset of the pandemic, for instance, the 30-year often stayed between 3.5% and 4.5%.)  The low rates have bolstered buying power during the pandemic, allowing house hunters to buy more expensive homes with the same monthly budget and helping to fuel a fiercely competitive residential real estate boom. But home prices have gotten so high, and the choice of homes so small, that the relatively low rates are increasingly not enough for prospective homebuyers. And rates are expected to increase “gradually” later in the year, Freddie Mac said this week.

30-Year Mortgage Rates Fall

A 30-year fixed mortgage is by far the most common type of mortgage because it offers a consistent and relatively low monthly payment. (Shorter-term fixed mortgages have higher payments because the borrowed money is paid back more quickly.)  Besides conventional 30-year mortgages, some are backed by the Federal Housing Authority or the Department of Veterans Affairs. FHA loans offer borrowers with lower credit scores or a smaller down payment a better deal than they might otherwise get; VA loans let current or past members of the military and their families skip a down payment.

30-year fixed: The average rate fell to 3.19% from 3.23% the previous business day. A week ago, it was 3.16%. For every $100,000 borrowed, monthly payments would cost about $431.92, or $1.64 more than a week ago.30-year fixed (FHA): The average rate fell to 3.02%, down from 3.07% the previous business day. A week ago, it was 3.01%. For every $100,000 borrowed, monthly payments would cost about $422.68, or $0.54 more than a week ago.30-year fixed (VA): The average rate fell to 3.07% from 3.12% the previous business day. A week ago, it was 3.05%. For every $100,000 borrowed, monthly payments will cost about $425.39, or $1.08 more than a week ago.

15-Year Mortgage Rate Drops

The major advantage of a 15-year fixed mortgage is that it offers a lower interest rate than the 30-year and you’re paying off your loan more quickly, so your total borrowing costs are far lower. But for the same reason—that the loan is paid back over a shorter time frame—the monthly payments will be higher.

15-year fixed: The average rate fell to 2.39%, down from $2.42 the previous business day. A week ago, it was 2.36%. For every $100,000 borrowed, monthly payments would cost about $661.62, or $1.40 more than a week ago.

Jumbo Mortgage Rates Decline

Jumbo loans, which allow you to borrow bigger amounts for more expensive properties, tend to have slightly higher interest rates than loans for more standard amounts. Jumbo means over the limit that Fannie Mae and Freddie Mac are willing to buy from lenders, typically $548,250 for a single-family home (except in Hawaii, Alaska, and a few federally designated high-cost markets, where the limit is $822,375).

Jumbo 30-year fixed: The average rate fell to 3.32% from 3.35% the previous business day. A week ago, it was 3.28%. For every $100,000 borrowed, monthly payments would cost about $439.06, or $2.21 more than a week ago.Jumbo 15-year fixed: The average rate fell to 2.98% from 2.99% the previous business day. A week ago, it was also 2.96%. For every $100,000 borrowed, monthly payments would cost about $689.62, or $0.96 more than a week ago.

Refinance Rates Fall 

Refinancing an existing mortgage tends to be slightly more expensive than getting a new one, especially in a low-rate environment.

30-year fixed: The average rate to refinance fell to 3.47% from 3.51% the previous business day. A week ago, it was 3.46%. For every $100,000 borrowed, monthly payments would cost about $447.37 or $0.56 more than a week ago.15-year fixed: The average rate to refinance fell to 2.61% from 2.63% the previous business day. A week ago, it was 2.60%. For every $100,000 borrowed, monthly payments at that rate will cost about $671.98, or $0.47 more than a week ago.

Methodology

Our rates for “today” reflect national averages provided by more than 200 of the country’s top lenders one business day ago, and the “previous” is the rate provided the business day before that. Similarly, the week earlier references compare the data from five business days earlier (so bank holidays are excluded.) The rates assume a loan-to-value ratio of 80% and a borrower with a FICO credit score of 700 to 759—within the “good” to “very good” range. They’re representative of the rates customers would see in actual quotes from lenders, based on their qualifications, and may vary from advertised teaser rates. David Rubin contributed to this report. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.