Mortgage rates started the year with a new record low. The 30-year fixed-rate mortgage dropped to a 2.65% average this week, the lowest since Freddie Mac began tracking such records more than 50 years ago.

“Despite a full percentage point decline in rates over the past year, housing affordability has decreased because these low rates have been offset by rising home prices,” says Sam Khater, Freddie Mac’s chief economist. “However, the forces behind the drop in rates have been shifting over the last few months, and rates are poised to rise modestly this year.”

The National Association of REALTORS® has forecasted mortgage rates to average 3.1% in 2021.

Freddie Mac reports the following national averages rates for the week ending Jan. 7:

*30-year fixed-rate mortgages: averaged 2.65%, with an average 0.7 point, dropping from last week’s 2.67% average. Last year at this time, 30-year rates averaged 3.64%.

*15-year fixed-rate mortgages: averaged 2.16%, with an average 0.6 point, falling slightly from last week’s 2.17% average. A year ago, 15-year rates averaged 3.07%.

Source: Freddie Mac and National Association of REALTORS® Economists’ Outlook blog