Today's Best Mortgage and Refinance Rates: January 19, 2021 | Rates Tick Down

The number of homes hitting the market dropped for the first time in months and competition for available homes remains high.

Meanwhile, mortgage rates ended last week slightly lower across the board.

Today's Mortgage Rates

The average interest rate on a 30-year fixed-rate mortgage was 3.132% on Friday — down from 3.137% a day earlier.

Source: Money | Date: Jan. 15, 2021 | Rates assume a credit score of 700

Money's daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the previous day. They reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. The rates assume a 20% down payment and include discount points.

Freddie Mac's benchmark Primary Mortgage Market Survey put mortgage rates at 2.79% with 0.7 points paid for the week ending January 14. That's a significant jump of 0.14 percentage points compared to last week's new all-time low of 2.65%. The mortgage purchaser's weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.

How do I get the best mortgage rates?

Mortgage rates vary from state-to-state. On Thursday, borrowers in Illinois were quoted the lowest mortgage rates — at 3.081%. People looking for mortgages in Nevada saw the highest average rate at 3.202%.

Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.923%, while those with credit of 620 or below were shown rates of 4.184%.

You may be able to negotiate a better interest rate if you shop around or if you have other accounts with the lender. (To get started, take a look at Money's picks for the best mortgage lenders.) Currently, some lenders are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.

Today's Mortgage Refinance Rates

Money's survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.213% on Thursday. In January 2020, the average mortgage rate (including fees) was around 3.8%.

Source: Money | Date: Jan. 15, 2021 | Rates assume a credit score of 740

What else is happening in the housing market today?

Over the four week period ending January 10, the number of new home listings decreased 3% from a year earlier, according to Redfin's most recent Housing Market Update. It's the first year-over-year decrease since July. Buyers, however, remained active.

“Buyers are likely disappointed by the lack of new homes listed in the past month,” said Daryl Fairweather, the brokerage's chief economist. “But that’s not stopping them from making offers on what is on the market, which is sending pending sales up."

Pending home sales came in at 35,575 units for the survey period, compared to 26,384 units for the same period in 2020. That's an increase of 35%. At the same time, high buyer demand also pushed the median sales price up to $320,025, an increase of 14%.

Overall inventory was down 33% year-over-year. Redfin estimates that there were 547,725 homes on the market by January 10, compared to 815,901 homes at the same point in 2020.

The lack of inventory, high buyer demand, and low interest rate environment all combined to keep the pace of sales well above last year's. Nearly 38% of pending sales went under contract within two weeks of listing, compared to 27% a year ago.

"It’s looking like 2021 will see a housing market frenzy that will rival what we experienced in 2020,” added Fairweather.

Mortgage Prediction of the Week

CoreLogic’s chief economist Frank Nothaft, on the prospect of inventory increasing during 2021:

“Once much of the population is vaccinated and as the pandemic subsides with warmer temperatures, we expect more inventory to come on the market,” Nothaft said. “Many older homeowners that had planned to sell in 2020 decided to postpone their listing until the pandemic risk has dissipated. If that happens by mid-year, then the increase in for-sale listings in the second half of the year — coupled with new single-family construction — will ease price growth.”

For more read: 2021 Real Estate Predictions: How Vaccines, President Biden and More Could Shape Housing Trends.

Bottom line:

Qualifying for a Mortgage Is Surprisingly Difficult Right Now

A Key Indicator Suggests Mortgage Rates' Epic Decline May Soon End

As Prices Soar, 6 Tricks for Finding a House You Can Actually Afford

Rates are subject to change. All information provided here is accurate as of the publish date.