Will Mortgage Rates Continue to Rise in the Wake of Stimulus and Vaccine?

Find out what we can expect for mortgage rates in 2021.
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Ryan Martinson
Jan 21, 2021·2 min read
Will Mortgage Rates Continue to Rise in the Wake of Stimulus and Vaccine?

While we saw mortgage rates repeatedly hit historic lows in 2020, it looks like rates might be headed in the opposite direction as we move further into 2021.

As the COVID-19 vaccine continues to roll out and a second set of stimulus payments are disbursed, the prospect of financial recovery has mortgage rates rising, and some experts speculate that rates could continue to trend upward in the coming weeks.

On the other hand, Bankrate Chief financial analyst, Greg McBride predicts that we could see rates continue to drop even lower in the first part of 2021, only to rise later in the year as the impact of the vaccine sinks in and pumps new life into the economy.

Should You Wait for Better Rates?

Even if rates are slightly on the rise, it may not be advisable to wait for them to go back down seeing as how they’re still undeniably low for the time being.

For context, a year ago the average rate for a 30 year fixed rate mortgage was 3.65% as compared to the 2.79% average rate at the time of this writing.

Is Now a Good Time to Buy a House?

The speculation seems to be that some folks might be holding onto their homes until things settle down with COVID-19 to avoid potentially contracting the virus from open houses and home tours. So if things go to plan with the vaccine, we could see an influx of inventory—particularly among baby boomer property owners in late 2021 and early 2022 which might create more of a buyer’s market as the supply goes up.

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How Long is it Taking Mortgages to Close Right Now?

As of late December, 2020 we wrote about how mortgages were taking 2 months on average to close, and we’ve heard conflicting anecdotal reports since then.

Some of our readers have been able to close within the normal 30 day window, while others are experiencing delays closer to the reported 45-60 days. Wait times will be variable depending on your specific case, but we do recommend being prepared for delays right now.


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