The 30-year fixed-rate mortgage (FRM) averaged 2.86%, staying relatively flat after experiencing a slight 1 basis point decrease, according to the latest Freddie Mac Primary Mortgage Market Survey® (PMMS®).
Mortgage details:
– The 30-year fixed-rate mortgage averaged 2.86% with an average 0.7 point for the week ending Aug.19, 2021, down slightly from last week’s 2.87%. Last year, the 30-year FRM averaged 2.99%.
– The 15-year fixed-rate mortgage averaged 2.16% with an average 0.6 point, up slightly last week when it averaged 2.15%. Last year, the 15-year FRM averaged 2.54%.
– The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.43% with an average 0.3 point, down slightly from last week’s 2.44%. Last year, the 5-year ARM averaged 2.91%.
The takeaway:
According to the Fed’s July meeting, employment has not seen the “substantial further progress” needed before it would consider raising rates. Although not a direct link to home lending, the Fed’s moves often shape the future of mortgage interest rates.
“Mortgage rates stayed relatively flat this week. Housing is in a similar phase of the economic cycle as many other consumer goods. While there is strong latent demand, low supply has caused prices to rise as shortages restrict the amount of sales activity that otherwise would occur.” — Freddie Mac Chief Economist Sam Khater
“The 10-year Treasury was flat early in the week due to weaker-than-expected retail sales, and mortgage rates responded to subsequent investor concerns about declining consumer sentiment and rising delta variant COVID cases. In addition, yesterday’s Federal Reserve minutes showed the central bank is considering tapering its asset purchases toward the end of 2021 because of concerns about inflation in light of the economic recovery. However, tapering Treasury purchases will be a likely first step, before cutting back on mortgage-backed securities. This means that we can expect rates to resume their mid-March climb above 3.0% closer to the end of the year, and into 2022.
“Mortgage rates remain favorable for buyers, many of whom are welcoming the markets’ noticeable shift toward more normal seasonal trends. Based on today’s realtor.com® inventory data, the number of homes for sale continues to grow as sellers are ready to move forward with delayed plans and take advantage of market conditions. We have seen three consecutive weeks of single-digit price gains, a clear sign that the last 12 months’ overheated price growth is behind us. This shift in inventory and pricing offers more choices for buyers along with more approachable prices. The next few months offer a golden window of opportunity for both buyers and sellers to capitalize on the combination of historically-low mortgage rates and rising inventory.” — realtor.com® Senior Economist George Ratiu
