Keep up with current rates and related 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). 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.
The average 30-year fixed-rate mortgage sank 10 basis points to 2.78% for the week ending on July 22, continuing several weeks of declines.
According to Sam Khater, Freddie Mac’s chief economist, concerns about the COVID-19 Delta variant and the recovery from the pandemic are taking their toll on economic growth.
While the economy continues to mend, Treasury yields have decreased, and mortgage rates have followed suit, said Khater. “Unfortunately, many homebuyers are unable to take advantage of low rates due to low inventory and high prices.”
While prospective homebuyers face a tough market, Khater added that declining mortgage rates give homeowners the chance to refinance and reduce their monthly payments.
Mortgage rates have mostly remained below 3% this year, despite predictions that they would return to higher levels earlier. Economists and investors are closely monitoring any indication from the Federal Reserve that it may begin tapering of mortgage backed securities and bond purchases.
Mortgage applications decreased 4% for the week ending July 16, just one week after applications jumped 16% on the strength of falling mortgage rates.
The 10-year Treasury yield dropped sharply last week, in part due to investors becoming more concerned about the spread of COVID variants and their impact on global economic growth. This, in turn, led to mixed changes in mortgage rates.
“The 30-year fixed rate increased slightly to 3.11% after two weeks of declines, and other surveyed rates moved lower, with the 15-year fixed rate loan — used by around 20% of refinance borrowers — decreasing to 2.46%,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “That’s the lowest level since January 2021.”
Kan added that, on a seasonally adjusted basis compared to the July 4th holiday week, purchase applications dipped back to near their lowest levels since May 2020.
“Limited inventory and higher prices are keeping some prospective homebuyers out of the market,” Kan said. “Refinance activity fell over the week, but because rates have stayed relatively low, the pace of applications was close to its highest level since early May 2021.”
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