The average 30-year fixed-rate mortgage declined marginally to 2.86% in the week ending Aug.19, according to mortgage rate data released Thursday. Freddie MacPMMS.
A week earlier, mortgage rates increased to 2.87%, after six consecutive weeks of a decrease in mortgage rates. The slight decline this week is closely related to the downward trend. U.S. Treasury yield. 10-year Treasuries were slightly lower this week after rebounding a week earlier. V 10-Year Treasury Bond Yield on August 18 it was 1.27.
According to Sam Hater, chief economist at Freddie Mac, as in other sectors of the economy, low housing stock and rising prices have lowered sales.
“Mortgage rates have remained relatively flat this week,” said Sam Hather, chief economist at Freddie Mac. “Housing is in the same phase of the economic cycle as many other consumer goods. While there is strong latent demand, low supply has driven prices up as the scarcity limits the volume of sales that would otherwise occur. ”
A year ago at this time, the average rate on a 30-year fixed rate mortgage was 2.99%. The 15-year fixed rate mortgage was up slightly from a week earlier, at 2.16%.
As rates change and the market moves to a more procurement-driven environment, lenders need to carefully monitor margins and profitability. If we have learned anything over the past year, it is that operational flexibility and accurate service pricing are the keys to lending profitability.
Submitted by: Black Knight
Mortgage rates remained below 3% for most of 2021, in part due to aggressive monthly asset purchases from outside The federal reserve… However, there are signs that the central bank will change its monthly purchases of $ 120 billion in US Treasury bonds and mortgage-backed securities.
In July Meeting of the Federal Open Markets CommitteeMost of the participants “considered it appropriate to start slowing down the pace of asset purchases this year.” Goldman Sachs predicted that the central bank would start phasing out asset purchases in November rather than December.
While rates are low enough for a significant part of borrowers to refinance your mortgage… But this share is decreasing, and if rates rise, as many predict, observers expect further declines in refinancing.
Last week mortgage applications decreased by 3.9% compared to a week earlier and fewer borrowers opted to refinance, according to the latest report Mortgage bankers Association.
As the 30-year mortgage rates tracked by the MBA reached 3.06%, some borrowers refused to refinance, contributing to the overall decline in mortgage applications.
“The increase in mortgage interest rates led to a 5% decrease in refinancing, which was due to a 7% drop in the number of ordinary refinancing applications. Although rates are 7 basis points lower than in the same week a year ago, the refinancing index is about 8% lower, Kahn said.
The share of refinancing mortgage activities fell to 67.3% of the total number of applications from 68.0% a week earlier.
While borrowers are weighing the benefits of refinancing their mortgage, they have fewer options in the buying market.
Low inventory levels are unlikely to improve significantly anytime soon, although percentage increase from historically low levels expected. This week, the US Census Bureau reported that housing construction began in July at 1,534,000, with no estimates available. Builders afraid to repeat mistakes from 2002 to 2005, when the market was oversaturated.
Accordingly, house prices continued to skyrocket. In May, house prices rose 16.6% over the same period last year. Case-Schiller S&P CoreLogic National House Price Index report…
Low rates usually encourage buying more homes. But constantly low stocks and low availability get in the way. By Federal Agency for Housing FinanceAccording to the Purchasing Power Index, house prices are expected to rise by 14.8% in 2021.
“For the housing market, at current business levels, the lack of stocks of homes for sale and the continuing supply chain bottlenecks faced by developers remain major constraints to buying,” said Mark Palim. Fannie Mae Vice President and Deputy Chief Economist. “Moreover, while mortgage rates have come down and theoretically provide more purchasing power for potential borrowers, in practice, given the current supply and affordability concerns, we expect this benefit to be limited.”