The average 30-year fixed rate mortgage (FRM) rate decreased slightly in the week ending June 18, 2021, to 2.93%. The average 15-year FRM rate remained roughly level at 2.24%. FRM rates recently rose from the record lows reached through the Federal Reserve’s (the Fed’s) efforts to stimulate lending during the ongoing recession. Beginning in March 2020, the Fed dropped their benchmark interest rate to zero and began purchasing mortgage-backed securities (MBS), fulfilling their role as the lender of last resort to ensure mortgage originations continued during the 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 show more interest in riskier, but potentially more profitable non-government investment opportunities. Also of note, the government’s continued stimulus injections are propping up the economy despite 2020’s historic job losses, over half of which have yet to be regained here in California going into mid-2021. The housing market’s performance in 2021-2022 will very much depend on the amount and duration of further government intervention, including stimulus, extensions of the foreclosure moratorium and any future job creation programs.

FRM rates are closely tied to the bond market, tending to move in tandem with the 10-year Treasury Note (T-Note) rate. The 10-year T-Note recently plunged to its lowest rate on record, but has since bounced back, at 1.46% as of June 18, 2021. In 2020, the expectation of a decline in business activity led bond market investors to seek the safety of Treasuries, accepting significantly lower yields in return for the safety of treasuries, which in turn pulled down FRM rates. Now, the only player to keep interest rates near the historic lows of 2020 will be the Fed, which may accomplish this task by amping up its MBS purchases.

The spread between the 10-year T-Note and 30-year FRM rate is 1.47% as of June 18, 2021, level with the historical difference 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 further without further Fed intervention.

The average monthly rate on ARMs decreased to 2.62% in May 2021, still above its low point of 2.49% experienced in May 2013. While recent months have seen the average ARM rate consistently higher than the average 30-year FRM rate, the 30-year FRM rate rose above the average ARM rate beginning in February, 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 ongoing recession, along with the global pandemic, continue to impact the housing market. Lost jobs decrease the willingness to take on large purchases, and California is still 1.7 million jobs below the pre-recession peak. While job losses typically result in reduced sales volume and prices, today’s low mortgage interest rates, along with historically low inventory, have helped inflate home prices. However, once the foreclosure moratorium ends at the end of June 2021, distressed sales will hit the market, putting downward pressure on home sales and prices.

Updated June 18, 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 06/18/21
2. 30-year FRM rate, monthly — Chart update 05/28/21
3. 15-year FRM rate — Chart update 06/18/21
4. 5/1 adjustable rate mortgage (ARM) rate — Chart update 05/28/21
5. 10-year Treasury note rate — Chart update 06/18/21
6. Combined FRM and 10-year Treasury note rates — Chart update 06/05/21
7. 91-day Treasury bill rate — Chart update 06/11/21
8. 3-month Treasury bill — Chart update 06/05/21
9. 6-month Treasury bill — Chart update 06/05/21
10. Treasury Securities average yield — Chart update 06/18/21
11. 12-month Treasury average — Chart update 06/05/21
12. Cost of Funds Index — Chart update 06/18/21
13. London Inter-Bank Offered rate (LIBOR) — Chart update 06/11/21
14. Secured Overnight Financing Rate (SOFR) — Chart update 06/18/21
15. Applicable federal rates — Chart update 06/11/21

 

Chart update 06/18/21

Current
06/18/21
2.93%

Month ago
05/21/21
3.00%
Year ago
06/19/20
3.13%
The average 30-year FRM rate in California is provided by Bankrate.com.

Chart update 05/28/21
May 2021
Average
2.96%
Apr 2021
Average
3.03%
May 2020
Average
3.23%
 
 
Chart update 06/18/21
Current
06/18/21
2.24%
Month ago
05/21/21
2.29%
Year ago
06/19/20
2.58%
The average 15-year FRM rate in California is provided by Bankrate.com.
More information:

 
Chart update 05/28/21
May 2021
2.62%
Apr 2021
2.80%
May 2020
3.16%
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 06/18/21
Current
06/18/21
1.46%
Month ago
05/21/21
1.63%
Year ago
06/19/20
0.73%
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 06/05/21
Avg 15-Year
May 2021
2.28%
Avg 30-Year
May 2021
2.96%
Avg 10-Year T-Note
May 2021
1.62%
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:

Chart update 06/11/21
Current
06/10/21
0.03%
Month Ago
05/13/21
0.02%
Year Ago
06/11/20
0.17%
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 06/05/21
May 2021
0.02%
Apr 2021
0.02%
May 2020
0.13%
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.

Chart update 06/05/21
 May 2021
0.04%
Apr 2021
0.04%
May 2020
0.15%

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 06/18/21
May 2021
0.05%
Apr 2021
0.06%
May 2020
0.16%
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 06/05/21
May 2021
0.11%
Apr 2021
0.12%
May 2020
1.32%
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 06/18/21
Apr 2021
0.34%
Mar 2021
0.38%
Apr 2020
0.74%
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.
Chart update 06/18/21
06/18/21
0.01%
05/21/21
0.01%
06/19/20
0.09%
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 06/11/21
1-Month
0.07%
6-Month
0.15%
1-Year
0.24%
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 06/11/21
Short (3 years or less)
Jun 2021
0.10%
Medium (3 to 9 years)
Jun 2021
0.77%
Long (9+ years)
Jun 2021
1.56%
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.