Mortgages Rates Dropped to 3.2% for First Time In Weeks. Here’s What Experts Predict Will Happen Next

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The average 30-year fixed mortgage rate dropped last week for the first time in three weeks.
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The average 30-year fixed-rate mortgage dropped 0.04% to 3.2% last week. 

While we did see rates below 3% earlier in the year, rates are still nearly a full 1% lower than pre-pandemic levels. Rates are also near all-time historical lows, making now a great time to refinance before rates have a chance to go back up. 

If you are considering refinancing or purchasing a new home, here is a closer look at what these rates could mean for you, and what we might see from rates in the future. 


Last week’s average mortgage rate is based on mortgage rate information provided by national lenders to, which like NextAdvisor is owned by Red Ventures.

Mortgage Rates: Looking Back 

The average 30-year fixed mortgage rate was 3.96% this time two years ago, before the pandemic took hold of the economy. Just one year later, in November 2020, rates dropped to 3.12%. 

This significant drop in rates can be largely associated with the outbreak of the COVID-19 pandemic and its effect on the economy. The U.S. Bureau of Labor Statistics (BLS) reported recently that 8.8 million people lost their jobs in 2020. As a result, the Federal Reserve took action to keep mortgage rates low and housing at more affordable levels. Combined with a rise in property values, these policy changes also created ideal circumstances for current homeowners to refinance their loans to a lower interest rate.

Mortgage Rates: Current Outlook  

2021 has seen mortgage rates on a gradual upward trend, with last week’s average 30-year fixed-rate sitting at 3.2%. The increase in rates is consistent with many experts who previously predicted rates would increase as the economy recovers from the pandemic. 

Existing homeowners are in a great position to take advantage of these low rates with a rate and term refinance. And with home prices steadily increasing, those who currently own a home will have more equity available to do a cash-out refinance to pay for things like home improvements, education, or paying off debts.  

Those looking to buy a home can also benefit from current low rates, though high home prices and competitive markets can eat into the advantages of getting a low rate. While the market is starting to cool down, it is still a seller’s market

Mortgage Rates: Looking Forward 

As the government scales back pandemic measures to keep rates low, housing experts predict rates will continue increasing

Many government-mandated forbearance programs are expiring in 2021 and millions are exiting their mortgage repayment plans in the coming months. As the economy continues to recover from the pandemic, government agencies will have fewer reasons to implement or maintain policies keeping rates low.

With rates forecasted to increase, now is a great time to refinance and lock in a low rate. If you’re looking to buy a home, it’s best to evaluate your overall homebuying budget and affordability of the monthly payments. With rising housing prices, a low rate may be a moot point if the home price is overshadowed by the savings from the low rate. 

For more homebuying advice, see NextAdvisors complete library of resources here.