Mortgage rates continue to drop below the 3% mark, and 30-year fixed rate mortgages (FRM) fell to 2.88% this week. from last week when it averaged 2.90% according to the latest Freddie Mac report Primary Mortgage Market Research (PMMS)… A year ago at this time, the average FRM over 30 years was 2.98%.
Freddie Mac also reported that the 15-year FRM averaged 2.22% this week, up 0.6 points on average, up from last week’s 2.20% average. A year ago at this time, the 15-year average FRM was 2.48%.
“The summer mortgage rate drop continues as the 30-year fixed rate mortgage falls for the third week in a row,” he said. Sam Hater, Chief Economist Freddie Mac. “Since a peak of 3.18% in April, mortgage rates have dropped by 30 basis points. While this decline is small, it brings moderate relief to borrowers who buy in a market with high home valuations and scarce inventories. ”
Proof of strength in the procurement market can be found in the findings of the Mortgage Bankers Association (MBA), as yesterday’s weekly mortgage application survey the number of mortgage applications increased by 16.0% compared to the previous week (for the week ended July 9, 2021). Not only did the shopping market go up, but the MBA’s refinancing index is up 20% from the previous week.
There is also a slight increase in stocks as many potential buyers are tired of the fierce wars between trades and prefer to stay put. BUT new analysis by Redfin found that 65% of housing offers written by Redfin agents faced competition in June 2021, up from a revised 72.1% level in May and a pandemic peak of 74.1% in April.
Buyer fatigue is seen as a factor that diminishes competition, as some home hunters fade into the background after repeatedly losing the bidding war after the bidding war, or simply leave the market altogether. Record high house prices are also keeping some on the sidelines: house prices rose to astronomical levels of nearly 18% year on year, and house price increases in May exceeded April’s rise in prices by 14.8%. according to Black Knight analysts…
However, as rates continue to plummet and remain below the 3% mark, Millennials born between 1980 and 1999 are driving buying activity, with the percentage of buying increasing for the third straight month. according to ICE Mortgage Technology Millennial Tracker… In May, 67% of loans closed by millennials on Encompass by ICE Mortgage Technology creation platform were for purchases, up from 61% in April 2021 and 51% in March 2021.
“We are seeing a strong and competitive purchasing market across the country, especially among millennials,” said Joe Tyrrell, President, ICE Mortgage Technology… “With the easing of FICO scoring requirements, millennials are taking advantage of the current environment to continue to engage in home ownership,” Tyrrell said.
As the workforce replenishes, more people are rebuilding their financial base as US Department of Labor reported that for the week ending July 10, the seasonally adjusted upfront initial jobless claims totaled 360,000, down 26,000 from the previous week’s revised level, the lowest for initial claims since March 14, 2020, when it was 256,000.
“Labor market conditions continue to improve, but there is still a long way to go. Labor demand seems to be very high; the number of vacancies is at an all-time high, recruitment is high, and many workers are leaving their current jobs in search of better ones, ” Federal Reserve Chairman Jerome Powell told the House Financial Services Committee on Wednesday.… “Indeed, from April to June, employers added 1.7 million workers. However, the unemployment rate in June remained elevated at 5.9%, a figure that underestimates the employment gap, especially as labor market participation has not increased from the lows that prevailed for much of last year. Job growth should be significant in the coming months as public health continues to improve and some of the other pandemic-related factors that currently weigh them down will decrease. ”