Mortgage rates keep moving sideways

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Washington Post

Mortgage rates seem to be falling with the arrival of summer.

According to the latest data released on Thursday by Freddie Mac, the 30-year average fixed rate rose to 2.87% with an average of 0.6 points. (Points are a commission paid to the lender at 1% of the loan amount. They are added to the interest rate.) A week ago it was 2.86%, and a year ago it was 2.91%. Over the past two months, the fixed 30-year average has remained below 3%. The 15-year average fixed interest rate rose slightly to 2.17% with an average of 0.6 points. A week ago, it was 2.16%, and a year ago – 2.46%. The average five-year regulated interest rate fell to 2.42% from an average of 0.2 points. A week ago, it was 2.43%, and a year ago – 2.91%.“When you rest from your bungee jump, you rock up and down a bit,” said Holden Lewis, home and mortgage lending specialist at NerdWallet. “This is how mortgage rates look like now. The threat of a pandemic to the economy is pushing rates down, and the prospect of tighter monetary policy is pushing them up. The end result is relative inaction, which will persist until the Federal Reserve decisively raises mortgage rates. ”

Mortgage rates tend to follow the same trajectory as long-term bond yields, although this has become less relevant lately. The yield on the 10-year Treasury bond has remained below 1.3% since Aug. 13. But then it jumped to 1.35% on Wednesday, the largest one-day gain in more than two weeks. The move was taken too late to influence the Freddie Mac poll earlier in the week.

“10-year Treasuries … have traded in a tight range over the past 30 days and have dropped sharply from about 1.6% over the past 90 days,” said Mitch Albaum, a mortgage banker at Macoy Capital Partners. “All expectations come from [Jackson Hole Economic Symposium] later this week about narrowing [Federal Reserve] bond buying program, and I am sure that [Fed] Chairperson [Jerome] Powell will take a wait and see attitude. There really is no other way to play it without additional data on the US and the global economy. “

Investors are eagerly awaiting what Powell has to say at Friday’s symposium. If he talks about the central bank’s plans to roll back or roll back its bond buying program, it could have a huge impact on mortgage rates.

“Friday could be an interesting day if Fed Chairman Powell signals the start of a cut,” said Gordon Miller, owner of Miller Lending Group. “Since I do not believe this will be the case, rates should remain in a tight range until the end of September, before the Fed says if they begin to narrow at its November meeting.”

Danielle Hale, chief economist at Realtor.com, said financial markets continue to digest the minutes of the July Federal Reserve meeting while they await Powell’s comments.

“Investors are waiting for an excuse to go in a new direction, and while we can understand this from Fed Chairman Powell’s speech on Friday, it’s more likely that the data coming from this drop will be the reason for the rate change,” she said. “The rates will start to rise if we continue to make progress in the fight against the pandemic, which suggests that the economy will stay on track and, although less likely, rates could come down if the number of coronavirus cases continues to rise.”

Bankrate.com, which publishes a weekly index of mortgage rates, found that half of the experts it surveyed predicted rates would remain unchanged this week.

“Despite serious uncertainty in Afghanistan, mortgage bonds have not responded to negative news in the usual way,” said Elizabeth Rose, sales manager for AmCap Mortgage. “As long as bonds can maintain the current level and not break the next support level, rates will remain the same.”

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