Omicron variant drives decrease in mortgage rates: Freddie Mac

Mortgage interest rates dropped after the COVID-19 omicron variant began spreading across the U.S., according to the latest data from Freddie Mac. 

"Market volatility" caused the 30-year mortgage to drop seven percentage points – to 3.05% APR – for the week ending Dec. 23, 2021.

"As the year comes to a close, the housing market is proceeding steadily, said Freddie Mac Chief Economist Sam Khater. "However, rates are expected to increase in 2022 which will impact homebuyer demand as well as refinance activity."

If you want to take advantage of low mortgage rates to reduce your monthly payment, visit Credible today to find your personalized rate for your loan amount. Doing so won't affect your credit score.

HOMEOWNERS GAINED $250B IN EQUITY IN Q3: BLACK KNIGHT REPORT

Housing market awaits omicron effects

The 15-year conventional loan rate also dropped the week before Christmas, to 2.3%. This was a drop from 2.34% the week prior, but up from 2.19% at the same time last year. The five-year Treasury indexed hybrid adjustable-rate mortgage also fell to 2.37%, compared to 2.45% last week and 2.79% the same time in 2020.

"Investors kept a cautious wait-and-see approach to the omicron variant, as signals point to higher levels of contagion, but lower levels of sever symptoms," said George Ratiu, Realtor.com's manager of economic research. "In positive news, this week saw an upward revision to third quarter GDP and an increase in existing home sales, pointing to an active market in a historically slower season."

If you want to take advantage of lower interest rates before they begin to rise, consider refinancing your home loan in order to save money on your monthly mortgage payment. Visit Credible to compare multiple mortgage lenders and choose the one with the best mortgage rate or down payment option for you. 

HOME PRICES SURGE 19.5% ANNUALLY IN SEPTEMBER, BUT EXPERTS SAY PACE OF GROWTH IS SLOWING

Real estate markets remain "unseasonably lively" through holidays

Despite the expected downturn to the housing market during the holiday season, looming 2022 interest rate hikes have kept the industry active for potential borrowers.

"As we enter the holiday season and many families look forward to celebrations and a slight respite from another challenging year, real estate markets remain unseasonably lively," Ratiu said. "Buyers continue to close contracts for both new and existing homes, hurrying to lock in low mortgage rates before they rise. The combination of rising inflation and the Federal Reserve’s accelerated tapering of mortgage-backed securities purchases is expected to push interest rates higher in 2022, trimming many buyers’ budgets."

If you are interested in refinancing your mortgage or taking advantage of your home's equity, contact Credible to speak to a home loan expert and get all of your questions answered.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.