In 2021, the average mortgage interest rate for a 30-year fixed-rate home loan in the United States was approximately 3.1%, while the 15-year fixed-rate loan averaged 2.5%. These rates reflected a combination of low long-term Treasury yields and cautious economic recovery following the COVID-19 pandemic.

The 2021 mortgage rate environment was shaped by several factors. First, the Federal Reserve maintained near-zero short-term interest rates to support economic growth, which indirectly suppressed long-term mortgage rates. The 10-year Treasury yield, a key benchmark for mortgages, averaged 1.5% in 2021, down from 1.6% in 2020, according to the Federal Reserve Economic Data (FRED). Second, demand for housing surged due to low rates, remote work flexibility, and federal stimulus programs, while supply constraints limited inventory. The National Association of Realtors reported a 11.8% year-over-year increase in existing home sales in 2021. However, rising inflation and labor shortages later in the year prompted the Fed to begin raising rates in June 2022, causing mortgage rates to climb above 3% by year-end. Data from the Federal Housing Finance Agency (FHFA) showed the 30-year fixed-rate mortgage averaged 3.29% in December 2021, up from 2.65% in January 2021. These trends highlight the interplay between monetary policy, economic conditions, and housing market dynamics in shaping mortgage rates.