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Mortgage rates move slowly despite tightening market

Rates decreased one basis point to 3.10%

Mortgage rates decreased one basis point to 3.10% in the week ending Dec. 9, remaining low and stable despite tighter housing supply and affordability, according to the latest Freddie Mac PMMS mortgage report.

A year ago at this time, the average 30-year fixed-rate loan averaged just 2.71%, according to the report published on Thursday.

Sam Khater, Freddie Mac’s chief economist, said in a statement that rates have moved sideways over the last several weeks, fluctuating within a narrow range.

“Going forward, the path that rates take will be directly impacted by more information about the Omicron variant as it is revealed and the overall trajectory of the pandemic,” Khater said. “In the meantime, rates remain low and stable, even as the nation faces declining housing affordability and low inventory.”

The survey focuses on conventional, conforming, and fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit.


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HousingWire Editor-in-Chief Sarah Wheeler and Deluxe Senior Business Development Executive Mark McGuinn discuss the challenges lenders are facing to optimize lead generation, even as mortgage rates continue to change. 

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Economists at Freddie Mac said the 15-year fixed-rate mortgage averaged 2.38% last week, down from 2.39% the week prior. However, it’s higher than it was a year ago, at 2.26%. Meanwhile, the five-year ARM decreased to 2.45%, down four basis points from last week. A year ago, 5-year ARMs averaged 2.79%.

Mortgage rates tend to move in concert with the 10-year Treasury yield, which reached 1.52% on Dec. 8, up from 1.43% a week before.

The year-over-year increase in rates is impacting mortgage applications. The latest Mortgage Bankers Association (MBA) survey published on Wednesday showed a 27.3% decline for the week ending Dec. 3, in comparison to a year ago. The decline is higher in refinance (36.5%) than in purchases (9.4%).

Compared to the previous week, the overall market composite index grew 2% on a seasonally adjusted basis.

“Mortgage rates declined for the first time in a month, prompting a pickup in refinancing, with government refinances increasing more than 20% over the week,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement. “Borrowers are continuing to act on these opportunities, but if rates trend higher as MBA is forecasting, the window of opportunity to refinance will continue to get smaller.”

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