Bay Area Mortgage Rate Update & Outlook: Late Summer 2021

Home buyers and mortgage shoppers in the San Francisco Bay area have enjoyed low mortgage rates for several months now. That makes it a good time to buy or refinance a home, at least where interest rates are concerned. Today, we will offer an update on Bay Area mortgage rate trends in 2021, with an outlook into 2022.

Bay Area Mortgage Rate Trends 2021: Summer Update

Bay Area mortgage rates have been hovering at historically low levels for quite some time now. They rose a bit back in April of this year. But aside from that brief uptick, 30-year mortgage rates have been hovering below 3% for most of 2021 (on average).

During the first week of September, Freddie Mac published the results of their latest nationwide mortgage rate survey. According to that report:

• The average rate for a 30-year fixed mortgage loan was 2.87%.
• The average for a 15-year fixed mortgage was 2.18%.
• The average rate assigned to a 5-year adjustable (ARM) home loan was 2.43%.

That’s just slightly higher than where we were at the beginning of 2021. Back in January, Bay Area mortgage rates were hovering around 2.65% for a 30-year fixed loan, on average. They rose to a high of around 3.18% in April of this year, and have since fallen back down below the 3% threshold.

To quote their September 2nd report:

“Economic growth and the acceleration in inflation have moderated in the last month, giving the markets comfort and leading to a stabilization in mortgage rates. Heading into the fall, home purchase demand is stable, home sales remain firm and above pre-pandemic levels, and inventory of unsold homes is tight but improving modestly.”

A Good Time to Buy or Refinance

That’s an update on San Francisco Bay Area mortgage rates for 2021, as of late summer. The bottom line here is that borrowing costs have remained favorable throughout 2021. Many home buyers and refinancing homeowners have been able to capitalize on these low rates.

With Bay Area mortgage rates hovering at such low levels, now could be a great time to buy or refinance a home. Buyers have the opportunity to lock in with a very low rate and keep it for the long term, by using a fixed mortgage. And many homeowners in the Bay Area are currently in a position to lower their mortgage rate and monthly payments, thus saving money over the long term.

Related: Average monthly mortgage payments in 2021

Of course, we don’t know what Bay Area mortgage rates will be like several months from now, or in 2022. If recent forecasts are any indication, borrowing costs could start to rise gradually over the coming months. (See below.) So there might be a sense of urgency here, in terms of locking in a low mortgage rate in the Bay Area.

MBA Forecast Predicts a Gradual Rise Ahead

Back in August of 2021, the Mortgage Bankers Association (MBA) published an update to its long-range “Mortgage Finance Forecast.” Among other things, the industry group predicted that home loan interest rates could rise between now and next year.

Specifically, the MBA predicted that the average rate for a 30-year fixed mortgage loan would reach 3.3% by the end of 2021. Looking to beyond that, they expect 30-year home loan rates to average 3.5% at the start of 2022, and possibly rise to about 4% by the end of that year.

Granted, this is just a prediction based on current trends and expectations. It’s the equivalent of an educated guess and therefore far from certain. But the key takeaway here is that many forecasters expect home loan rates to rise — by some degree — over the coming months. It’s something to keep an eye on, if you’re planning to buy or refinance a home.

We can say with certainty that Bay Area mortgage rates remain very favorable in 2021. But we don’t know for sure what they will do down the road.

In light of this recent forecast, home buyers and homeowners who are on the fence about locking in a mortgage rate might want to do it sooner rather than later. If Bay Area mortgage rates starts to rise, as they’ve been predicted to do, it could narrow the refinancing window for homeowners and reduce purchasing power among buyers.

Need a Home Loan in the Bay Area?

Bridgepoint Funding has been serving home buyers and homeowners across the San Francisco Bay Area for nearly 20 years. We are a local company based right here in the East Bay. We offer a broad range of mortgage financing options, including popular programs like conventional, FHA and VA home loans.

If you would like to receive a mortgage rate quote in the Bay Area – or if you just have questions about the loan process – please contact our staff. We can help you explore your financing options and possibly pre-approve you for a home loan.

Disclaimer: This article includes predictions related to Bay Area mortgage rates in 2021 and 2022. Those forecasts were provided by third parties not associated with our company. We’ve included that information as an educational service to our readers.