According to mortgage rates data released Thursday, July 29, the average 30-year fixed rate mortgage rose marginally to 2.80% in the week ending July 29, halting a series of weekly declines. Freddie MacPMMS.
Despite some uncertainty over the Covid-19 Delta option, the housing market is still at an all-time low, according to Sam Hater, chief economist at Freddie Mac.
“As the economy works to return to its pre-pandemic state and the fight against the Covid-19 variants unfolds, owners and buyers continue to receive some of the lowest mortgage rates ever,” Hather said. …
The 15-year fixed-rate mortgage was down two basis points from last week, averaging 2.10% for the week ending July 29.
Mortgage rates have rarely exceeded 3% this year, despite forecasts that they will return to higher levels by 2021. Economists and investors keep a close eye on any Federal Reserve designation that he could start cutting back on purchases of mortgage-backed securities and bonds.
So far, the Federal Reserve has not indicated that it will change its accommodative position until significant further progress is made in the labor market.
At a press conference following the FOMC meeting this week, Federal Reserve Chairman Jerome Powell said the labor market has “ground to cover” before shrinking it. $ 120 billion monthly asset purchases…
Since March 2020, purchases of Fed assets have been split between $ 80 billion in US Treasuries and $ 40 billion in mortgage-backed securities each month, keeping long-term borrowing costs low. A year ago at this time, the average rate on a 30-year fixed rate mortgage was 2.99%.
Despite the low cost of borrowing, the housing market is showing signs of sluggishness.
10-year Treasury yields fell sharply last week, according to report Mortgage Bankers Association… Investors are increasingly worried about growth in cases of the Delta variantand what the economic implications will be, according to Joel Kahn, MBA’s deputy vice president of economic and industry forecasting.
This resulted in a 30-year fixed mortgage rate goes down to its lowest level since February, the trade association said. The 30-year fixed rate mortgage and the corresponding loan balance ($ 548,250 or less) dropped to 3.01% from 3.11% in the week ending July 23.
The 15-year mortgage rate also fell to an all-time low last seen in 1990, dropping 10 basis points to 2.36. These ultra-low rates naturally led to a sharp increase in refinancing activity.
“With over 95% of applications for refinancing fixed rate mortgages, borrowers are looking to secure a lower rate for the life of their loan,” Kahn said Wednesday.
But low rates had little impact on the buying market, which is still struggling with record house prices. The buying index declines for the second straight week to its lowest level since May 2020, continuing its third month of year-on-year decline.
The shopping index was down 1% from a week earlier and 18% from a year ago.
The Federal Housing Finance Agency also reported In May, house prices were 18% higher than a year ago. The Highlands, which includes Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming, experienced the sharpest annual growth. House prices in these states rose 23.2%, according to a FHFA report.
“This continues the seven-month trend of unprecedented growth in house prices,” said Kahn. “Potential buyers continue to be deterred by extremely high house prices and increased competition… “