Mortgage Rates Are Rising. Here’s What 5 Experts Predict for March 2021

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Mortgage rates are continuing to rise since hitting a record low at the beginning of the year. 

This week, the average 30-year fixed mortgage rate rose to over 3%, for the first time since July of 2020.

With the recent surge in rates, it looks like the days of new record lows may be behind us. But it’s still an excellent time to take out a home loan. Mortgage and refinance rates remain low compared to historical mortgage rates. And rates are likely to stabilize over the next 30 days, according to five economists and financial analysts surveyed by NextAdvisor.    

In the past month, mortgage rates rose 0.29% following the massive increase in 10-year Treasury yields. This is largely the result of investors expecting the economy to rebound and inflation to increase. As of March 4, 2021, the average 30-year fixed mortgage rate was 3.02% according to the latest Freddie Mac survey.

For a homeowner, the difference between 2.73% and 3.02% on a $350,000 30-year mortgage is significant. That change would cost a buyer an extra $54 a month and nearly $19,600 more in interest over the life of the loan.

Here’s where experts expect mortgage rates to head in March 2021:

Tendayi Kapfidze, Chief Economist with LendingTree


Mortgage rates will largely flatten out in March with the possibility of a small increase, Kapfidze predicts. “What is driving rates up is the expectation from the stimulus bill and vaccines rolling out that the economy’s going to get a boost this year,” he says. While he believes we’ll see healthy economic growth, the rapid rise in rates may be a bit premature. “I don’t know that we’re going to see inflationary growth to the extent that the interest rate markets seem to be suggesting,” Kapfidze says.

So don’t expect rates to continue to skyrocket in the medium to long term.

Odeta Kushi, Deputy Chief Economist at First American Financial Corporation

Where mortgage rates move is tied to wider economic trends, and Kushi says the recent spike in rates is a sign of growing confidence in our economic recovery. “Long-term Treasury rates have been rising in recent weeks, which has been putting some upward pressure on mortgage rates,” she says. Treasury bonds are considered a safe haven asset and when demand for these assets weakens, yields increase. “So in some ways the rise in yields is a vote of confidence in the economy,” Kushi says.

However, she doesn’t expect low rates to disappear overnight. “While rates may bounce around a little bit, by any historic standard they will be low,” Kushi says.

Selma Hepp, Deputy Chief Economist at CoreLogic


The recent swelling of mortgage rates hasn’t changed Hepp’s outlook for the future. “We are still of the opinion that [mortgage rates] are going to remain in the low 3s,” she says. “Our average for the next year and a half is about 3.2%.” Future rates are highly dependent on what happens with inflation, and Treasury rates, which have been rising. “That’s what’s going to play on the minds of lenders, in the short term” Hepp says.

Greg McBride, Chief Financial Analyst for


Mortgage rates should settle down following their late-February jump and stabilize with only moderate changes throughout March, McBride says. “Markets often resemble a game of baseball: long periods where nothing happens and then short periods where there’s a flurry of activity,” he says. He believes that in the coming months year over year inflation could look higher than it actually is because price levels dropped at the same time last year. “If the consumer price index held at its current level for the next six months, it would still look like inflation’s accelerating, and that’s because of the low bar set last year,” McBride says.

So we won’t have a good idea of whether higher inflation, which would drive rates up, is sustainable until the second half of 2021. “A brief spurt is consistent with an economy that’s rebounding. What really makes bond investors nervous is a sustainable rise in the pace of inflation,” he says. 

Robert Deitz, Chief Economist for the National Association of Home Builders


Mortgage rates will gradually head higher, but still average below 4% over the next two years, according to Deitz. “In 2021, our GDP forecast I think is a more conservative one, but we still have a 5% gain in the size of the overall economy this year,” he says. Faster growth will lead to rising interest rates. However, the Federal Reserve still wants to keep rates low, and isn’t increasing the federal funds rate or decreasing its purchase of mortgage-backed securities. “The Federal Reserve is being accommodative with the monetary policy on the long rates, and is certainly helping [keep rates low],” Deitz, says.

What Does This Mean for Your March Home Buying or Refinancing Plans?

The biggest problem for home buyers in today’s market is that demand has far outstripped supply. The increased competition for homes has led to bidding wars and rising home prices. While low mortgage rates have played a part in this, don’t expect moderate rate increases to make a dramatic difference. “It may cause the purchase market to downshift from red hot to merely sizzling,” McBride says.

Mortgage rate increases could make somewhat of a difference when it comes to deciding whether or not to refinance your mortgage. The unprecedented low rates we had for the past year fueled a boom in refinancing. Rates were low enough to offset the upfront cost of refinancing for many homeowners. But as rates have climbed up, the demand for mortgage refinancing has slowed slightly.

However, demand for home loans is still robust. Year over year, refinance applications are up 50%, even with the recent downturn. And in January housing prices increased 14.1% compared to the same period last year. So don’t expect the current mortgage rates to cause big changes in the mortgage and real estate markets.

How to Get the Best Mortgage Rate Regardless of Where They’re Headed

To get the lowest mortgage rate possible, you need to shop around and compare different lenders’ rates. “We found that the spread for the same borrower … between the highest and lowest rates can be more than 0.5%,” Kapfidze says. “In January the spread for purchases was 0.74% and the spread for refinances was 0.82%.” So finding the best lender can easily more than offset mortgage rate increases.

Your personal finances also matter when it comes to mortgage rates. Before you apply for a mortgage or refinance loan, review your credit report. Correcting errors or taking the time to build your credit score to 740 or higher will also help you get a lower rate. And saving up for a bigger down payment and paying down your debt are important. A larger down payment will decrease your loan-to-value ratio (LTV), which lenders like to see. Having less debt decreases your debt-to-income ratio, and will help you secure a better rate.