Mortgage rates remained at 2.87%.

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The median 30-year fixed rate mortgage remained stable at 2.87% in the week ending Aug. 26, according to mortgage rate data released Thursday. Freddie MacPMMS.

A week earlier, mortgage rates decreased slightly up to 2.86%. The near-constant mortgage rates this week may not yet reflect the rise in US Treasury yields, which increased towards the end of the week. The yield on 10-year Treasury bonds as of August 25 was 1.35.

Freddie Mac’s chief economist Sam Hater said fears about COVID-19 are in stark contrast to the economic recovery, which is causing mortgage rates to stall.

“The tug of war between the economic recovery and the rise in COVID-19 cases has caused mortgage rates to move sideways over the past few weeks,” Hather said. “Overall, rates remain low, opening up opportunities for those who haven’t refinanced rates below 3%.”

Hater added that the demand for buy bids is improving, but very low inventory is a major impediment to growth in home sales.

A year ago at this time, the average rate on a mortgage with a fixed interest rate for 30 years was 2.91%. The 15-year fixed rate mortgage was up slightly from a week earlier, again by 2.17%.

Mortgage rates remained below 3% for most of 2021, in part due to aggressive monthly asset purchase Federal Reserve System. The central bank has hinted that it will gradually cut monthly purchases of US Treasury bonds and mortgage-backed securities by $ 120 billion.

Observers expect the Federal Reserve to start cutting back on asset purchases by November.

At that time, rates below 3% continue to apply for mortgages, including refinancing, although refinancing wave has dropped from a peak in 2020.

The number of applications for mortgages this week rose by 1.6%, which was consistent with the fall in Treasury yields. last report from Mortgage Bankers Association

Refinancing increased 1% from the previous week, and mortgage applications rose 3%, according to the trade group, which has not been seen since July. The index is still down 16% from the same period last year.

The share of refinancing did not change compared to the previous week and amounted to 67.3% of the total number of applications.

“Treasury yields plummeted last week as investors continued to anxiously monitor whether the surge in COVID-19 cases in several states would weaken economic activity,” said Joel Kahn, MBA’s deputy vice president of economic and industry forecasting. … “As a result, mortgage rates fell slightly, while the 30-year fixed rate fell for the first time in three weeks. Lower rates led to an increase in the number of refinancing applications, while the number of applications for government loans jumped 10 percent to the highest level since May 2021. ”

Kang also noted that the number of applications for the purchase of both conventional and government loans increased in the week ending August 20. However, he said, the average loan size for mortgage applications has declined, “which is potentially a sign that more new buyers are looking for lower prices.” “High-value homes are helped by the recent increase in the number of homes for sale for both newly built and existing homes.”

While borrowers are weighing the benefits of refinancing their mortgages, in the buying market they are still faced with rising prices and a shortage of stocks.

Nevertheless National Association of Realtors reported 5.99 million home sales for July, which exceeded grades

Meanwhile, house prices continued to rise. The average secondary home price for all types of homes in July was $ 359,900, the trade group said, up 17.8% from last year.

The inventory shortage is expected to improve soon. Last week United States Census Bureau reported that the number of housing commissioned in July was 1,534,000, down 7% from estimates, but still an improvement over last year.

“Nearly 690,000 single-family homes are currently under construction – the highest number since 2007,” said Mike Fratantoni, chief economist at the MBA. “This is clearly a positive sign given the extremely low stocks in the market.”

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