The average 30-year fixed rate mortgage (FRM) rate continued to increase in the week ending October 22, 2021, now at 3.09%. The average 15-year FRM rate also increased to 2.33%. FRM rates recently rose from the record lows reached through the Federal Reserve’s (the Fed’s) efforts to stimulate lending during the 2020 recession.

The Fed intends to keep their benchmark interest rate near zero through at least 2023, but mortgage rates have risen from the historic lows of 2020 as bond market investors demand higher yields in the face of the coming bond taper. The positive impacts of the government’s stimulus injections in the face of 2020’s historic job losses have now come to an end. Further, with the recent end to the foreclosure moratorium and the expectation for reduced mortgage-backed bond (MBB) purchases, government support for the housing market is over.

FRM rates are closely tied to the bond market, tending to move in tandem with the 10-year Treasury Note (T-Note) rate. In 2020, the expectation of a decline in business activity led bond market investors to seek the safety of Treasuries, pushing the 10-year T-Note to a new low. It has since rebounded to 1.64% as of October 22, 2021. Now, the only player to keep interest rates near the historic lows of 2020 will be the Fed, with its MBB purchases. However, as the Fed plans their bond taper heading into 2022, expect interest rates to continue to rise in the months ahead.

The spread between the 10-year T-Note and 30-year FRM rate is 1.45% as of October 22, 2021, just below the historical rate of 1.5%. The higher margins seen through much of 2018-2020 signify that mortgage lenders had been padding their risk premiums on top of restricting mortgage credit. This spread has since shrunk, indicating lenders are unable to drop their mortgage rates much further without additional Fed intervention.

The average monthly rate on ARMs increased to 2.45% in September 2021. The 30-year FRM rate rose above the average ARM rate beginning in February 2021, making these riskier mortgage products more appealing. Therefore, ARM use will inch higher, even as the Fed works to keep interest rates on FRMs low. 

The recession hangover and pandemic continue to impact the housing market. California is still 1.3 million jobs below the pre-recession peak as of July 2021. While job losses typically result in reduced sales volume and prices, the low mortgage interest rates of 2020-2021, along with historically low inventory, have helped inflate home prices. But with the recent end of the foreclosure and eviction moratoriums along with the steady rise in interest rates, forced sales will soon hit the market, putting downward pressure on home sales and prices.

Updated October 22, 2021. Original copy released March 2012.

Click the link to go directly to a chart, or browse the charts by scrolling below.

1. 30-year fixed rate mortgage (FRM) rate, weekly — Chart update 10/22/21
2. 30-year FRM rate, monthly — Chart update 10/01/21
3. 15-year FRM rate — Chart update 10/22/21
4. 5/1 adjustable rate mortgage (ARM) rate — Chart update 10/01/21
5. 10-year Treasury note rate — Chart update 10/22/21
6. Combined FRM and 10-year Treasury note rates — Chart update 10/01/21
7. 91-day Treasury bill rate — Chart update 10/08/21
8. 3-month Treasury bill — Chart update 10/08/21
9. 6-month Treasury bill — Chart update 10/08/21
10. Treasury Securities average yield — Chart update 09/17/21
11. 12-month Treasury average — Chart update 10/08/21
12. Cost of Funds Index — Chart update 10/15/21
13. London Inter-Bank Offered rate (LIBOR) — Chart update 10/15/21
14. Secured Overnight Financing Rate (SOFR) — Chart update 10/22/21
15. Applicable federal rates — Chart update 10/22/21
Chart update 10/22/21

Current
10/22/21
3.09%
Month ago
09/24/21
2.88%
Year ago
10/23/20
2.80%
The average 30-year FRM rate in California is provided by Bankrate.com.
More information:
California Mortgage Rates by Bankrate.com 

Chart update 10/01/21
Sep 2021
Average
2.91%
Aug 2021
Average
2.84%
Sep 2020
Average
2.89%
 
 
Chart update 10/22/21
Current
10/22/21
2.33%
Month ago
09/17/21
2.15%
Year ago
10/16/20
2.33%
The average 15-year FRM rate in California is provided by Bankrate.com.
More information:
California Mortgage Rates by Bankrate.com 
 
Chart update 10/01/21
Sep 2021
2.45%
Aug 2021
2.42%
Sep 2020
2.98%
The 5/1 average adjustable rate mortgage (ARM) rate shows the average rate for the first five years after origination. After the initial five-year period, the ARM rate is adjusted annually based on an index figure, such as a certain Treasury Bill rate (which reflects Federal Reserve rate movements) or the London Inter-Bank Offered Rate (LIBOR). Beginning January 2016, the average ARM rate in California is provided by Bankrate.com. Prior to January 2016, the average ARM rate is provided by Freddie Mac’s survey of the Western Region of the U.S.
Chart update 10/22/21
Current
10/22/21
1.64%
Month ago
09/24/21
1.45%
Year ago
10/23/20
0.87%
This rate is a leading indicator of the direction of future Freddie Mac rates. The 10-year rate historically runs closer to 4% during a stable money market. The rate is influenced by worldwide demand for the dollar and anticipated future domestic inflation.
 
 

Chart update 10/01/21
Avg 15-Year
Sep 2021
2.19%
Avg 30-Year
Sep 2021
2.91%
Avg 10-Year T-Note
Sep 2021
1.37%
The average 15- and 30-year conventional commitment rates are the rates at which a lender commits to lend mortgage money in the United States-West/California for the duration of the life of each respective mortgage as reported by Freddie Mac. The green line reflects the 10-Year Treasury Note Average, a leading indicator of the direction of future Freddie Mac rates. It is comprised of the level of worldwide demand for the dollar and anticipated future domestic inflation.
More information:
Freddie Mac’s Primary Mortgage Market Survey report
California Mortgage Rates by Bankrate.com 
10-year Treasury Rate from the Federal Reserve
Chart update 10/08/21
Current
10/07/21
0.04%
Month Ago
09/09/21
0.05%
Year Ago
10/08/20
0.10%
This rate determines the minimum interest rate the seller must use in a delayed §1031 transaction and report when not receiving interest on §1031 monies held by a facilitator/accommodator. This rate also sets the amount of the ordinary income the facilitator/accommodator must report.
Chart update 10/08/21
Sep 2021
0.04%
Aug 2021
0.05%
Sep 2020
0.11%
The 3-Month Treasury Bill is the rate managed by the Federal Reserve through the Fed Funds Rate as the base price of borrowing money in the short-term. It is used in determining the yield spread, which predicts the likelihood of a recession one year forward. The posted rate is the monthly average for the listed month. Rates are released with a 1-2 month reporting delay.
Related article: Using the yield spread to forecast recessions
Chart update 10/08/21
 Sep 2021
0.0%
Aug 2021
0.06%
Sep 2020
0.12%

The six-month T-Bill rate is one of several indices used by lenders to periodically adjust the adjustable rate mortgage (ARM) rate. The adjusted rate equals the indexed rate (at the time of adjustment or an average of several prior rates) plus the lender’s profit margin. The posted rate is the monthly average for the listed month. Rates are released with a 1-2 month reporting delay.
Chart update 10/15/21
Sep 2021
0.07%
Aug 2021
0.07%
Sep 2020
0.13%
This index is one of several indexes used by lenders as stated in their ARM note to periodically adjust the note’s interest rate. The ARM interest rate equals T-Bill yield, plus the lender’s profit margin. The index is an average of T-Bill yields with maturities adjusted to one year.
Chart update 10/08/21
Sep 2021
0.08%
Aug 2021
0.09%
Sep 2020
0.74%
This index is one of several indexes used by lenders as stated in their ARM note to periodically adjust the note’s interest rate. This figure is an average of the one-year T-Bill rates for the past 12 months. The ARM interest rate equals the 12-Month Treasury Average yield plus the lender’s profit margin. There is a one-two month lag in data reporting for the 12-Month Treasury Average.
Chart update 10/15/21
Aug 2021
0.24%
Jul 2021
0.26%
Aug 2020
0.53%
This index is one of several indexes used by lenders to periodically adjust the interest rate on an ARM note. The ARM interest rate equals Cost of Funds Index, plus the lender’s profit margin. Current index reflects the cost of funds two months’ prior in the United States-West.
More information: Federal Home Loan Bank of San Francisco Cost of Fund’s Index page
Chart update 10/22/21
10/22/21
0.03%
09/24/21
0.05%
10/23/20
0.08%
This index is one of several indices used by lenders as stated in their ARM note to periodically adjust the note’s interest rate. It is taking over the LIBOR in 2021, which was found to be manipulated in the years leading up to the 2008 recession and financial crisis. The ARM interest rate equals the SOFR rate plus the lender’s profit margin. The rate is based on overnight borrowing in the U.S. Treasury repo market. The SOFR is produced in a transparent manner and is based on observable transactions, rather than models, and, unlike the LIBOR, is not dependent on bank estimates.
Chart update 10/15/21
1-Month
0.09%
6-Month
0.16%
1-Year
0.26%
This index is one of several indexes used by lenders as stated in their ARM note to periodically adjust the note’s interest rate. The ARM interest rate equals the LIBOR rate plus the lender’s profit margin. The rate is set by the banks in London, England.

Chart update 10/22/21
Short (3 years or less)
Nov 2021
0.17%
Medium (3 to 9 years)
Nov 2021
0.82%
Long (9+ years)
Nov 2021
1.40%
These rates determine minimum interest yield reportable on carryback financing. The AFR category is determined by the carryback due date. Rates are for monthly payments, reported for the coming month.
More information: Internal Revenue Service Applicable Federal Rates page