Keep up with current rates and news at HousingWire’s Mortgage Rates Center. Rates are updated twice weekly based on data from the Mortgage Bankers Association (MBA) and Freddie Mac‘s Primary Mortgage Market Survey (PMMS).
Note: Freddie Mac’s PMMS only covers purchase mortgages. In addition, the PMMS looks at rates from the first three days of the week from lender websites, while the MBA survey covers the rates on apps collected over the prior full week.
For the third consecutive week, mortgage rates managed to remain under 3%, dropping three basis points last week to an average of 2.96%.
Despite consistent forecasts of a market with rising rates, the 30-year fixed rate mirrored more closely numbers borrowers saw back in February. Sam Khater, Freddie Mac’s chief economist, pointed to a golden opportunity for homebuyers given the recent economic resurgence.
“Consumer income and spending are picking up, which is leading to an acceleration in economic growth,” Khater said. “The combination of low and stable rates, coupled with an improving economy, is good for homebuyers. It’s also good for homeowners who may have missed prior opportunities to refinance and increase their monthly cash flow.”
Mortgage applications dropped again, falling 0.9% from the previous week. MBA’s Associate Vice President of Economic and Industry Forecasting Joel Kan called last week’s mortgage activity “a mixed bag,” between rates, loan sizes, and government purchase applications.
“Mortgage rates were slightly higher, refinance applications were essentially unchanged, and purchase applications fell for the second straight week,” Kan said. “Both conventional and government purchase applications declined, but average loan sizes increased for each loan type. This is a sign that the competitive purchase market, driven by low housing inventory and high demand, is pushing prices higher and weighing down on activity. The higher prices are also affecting the mix of activity, with stronger growth in purchase loans with larger-than-average balances.”
“The 30-year fixed rate was up slightly to 3.18%, which is still 22 basis points lower than a year ago, but higher than it was between mid-2020 and February 2021,” he said.
For the second consecutive week, mortgage rates managed to hold steady below 3%, rising one basis point last week to 2.98%.
In light of the rising COVID-19 caseloads globally, U.S. Treasury yields stopped moving up a month ago and have remained within a narrow range as the market responds to incoming economic data, noted Sam Khater, Freddie Mac’s chief economist. While traders typically become hesitant ahead of economic speeches from the Federal Reserve, the FOMC once again did not change its stance on inflation and asset purchases, despite forward economic recovery.
“The good news is that with rates under three percent, refinancing continues to be attractive for many borrowers who financed before 2020,” Khater said. “But, for eager buyers, especially first-time homebuyers, inventory continues to be extremely tight and competition for available homes to purchase remains high.”
Mortgage applications decreased despite mortgage rates falling for the third week in a row, indicating high prices and low inventory, said Joel Kan, MBA associate vice president of economic and industry forecasting.
“Even with a few weeks of lower rates, most borrowers have likely already refinanced, which is why activity has decreased in seven of the last eight weeks,” Kan said. “The purchase market’s recent slide comes despite a strengthening economy and labor market. Activity is still above year-ago levels, but accelerating home-price growth and low inventory has led to a decline in purchase applications in four of the last five weeks.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 3.17% from 3.2%.
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