Freddie Mac’s latest Primary Mortgage Market Survey® (PMMS®) reports that the 30-year-fixed mortgage rates (FRM) averaged 2.87% in August.
Mortgage breakdown:
– The 30-year fixed-rate mortgage averaged 2.87% with an average 0.6 point for the week ending Aug. 26, 2021, up slightly from last week when it averaged 2.86%. Last year, the 30-year FRM averaged 2.91%.
– The 15-year fixed-rate mortgage averaged 2.17% with an average 0.6 point, up slightly last week when it averaged 2.16%. Last year, the 15-year FRM averaged 2.46%.
– The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.42% with an average 0.2 point, down slightly from last week when it averaged 2.43%. Last year, the 5-year ARM averaged 2.91%.
The takeaway:
There’s still plenty of opportunity available to homeowners and prospective homebuyers, but they aren’t without their challenges. The refi window is closing for many homeowners if rates move upward, closer to that 3% threshold. And while many buyers may jump at these low mortgage rates in order to secure a lower monthly payment, they may face additional hurdles with low inventory and continued affordability challenges due to rising home values.
“The tug-of-war between the economic recovery and rising COVID-19 cases has left mortgage rates moving sideways over the last few weeks. Overall, rates continue to be low, with a window of opportunity for those who did not refinance under 3%. From a homebuyer perspective, purchase application demand is improving, but the major obstacle to higher home sales remains very low inventory for consumers to purchase.” — Sam Khater, Freddie Mac’s Chief Economist
“Mortgage rates rose just 1 basis point to 2.87% in this week’s data from Freddie Mac, marking the third week in a row of relative steadiness. With the stock market hitting new highs and investors continuing to digest the July Fed meeting minutes while they await Chair Powell’s Friday speech, there were no major surprises that would spark a big move. Data on both existing-home sales and new-home sales in July showed that the housing market performed largely as expected, with a slight pick-up in the month but momentum notably down from last winter’s peak activity.
“The number of homes for sale remains low despite recent inventory improvements and home prices continue to go up, albeit at a slowing pace. Investors are waiting for a reason to go in a new direction and while we may get this from Fed Chair Powell’s speech on Friday, it’s more likely that incoming data this fall will be what causes rates to move. Rates will begin to climb if we make continued progress in fighting the pandemic which would suggest that the economy will remain on track, and while less likely, rates could falter if COVID cases continue to increase.
“For homebuyers, while the mortgage rate backdrop is important, the bigger challenge remains finding a home amid scarce options. A steady climb in homeowners deciding to sell will spell welcome relief and will likely enable more buyers to take advantage of still low mortgage rates. While we saw a smaller gain in new listings this week as students head back to school nationwide, we expect this setback to be temporary, meaning improved options for homebuyers in the months ahead.” — realtor.com® Chief Economist Danielle Hale
