Originally published by REALTOR.com | January 27, 2021
If you’re playing the waiting game with mortgage rates, you may not want to wait much longer.
A new study from Haus, the home-finance startup created by Uber co-founder Garrett Camp, examined what role seasonality, loan size, credit scores and other factors play in the mortgage rates that lenders offer borrowers.
The study found that much like the housing market itself the mortgage market ebbs and flows with the seasons. And January, as it turns out, is the best time of year to get a new home loan on average.
In January, lenders offer a discount of nearly 20 basis points compared to the time period between June and October when rates are typically the highest for the year. The cooler weather, in general, brings out lower mortgage rates, with December and February being the next-cheapest months based on the Haus study.
“Since home buying and refinancing is seasonal, there is less mortgage origination in winter months, so it could be that lenders must lower their rates to stay competitive and attract business,” he added.
To produce the report, Haus analyzed loan data from Freddie Mac for more than 8.5 million mortgages originated between 2012 and 2018. When examining for seasonality in mortgage rates, the company controlled for other characteristics, including the borrowers, size of the loan and the property.