What are the factors impacting the direction of mortgage rates?
Slower economic growth has pinned US mortgage rates below 3% in the past three months, and Freddie Mac reported that there’s little change this week.
Freddie’s recent Primary Mortgage Market Survey showed that the average 30-year fixed-rate mortgage moved up one basis point to 2.88% for the week ending September 09. A year ago at this time, the benchmark 30-year rate was 2.86%.
“While the economy continues to grow, it has lost momentum over the last two months due to the current wave of new COVID cases that has led to weaker employment, lower spending, and declining consumer confidence,” said Freddie Mac chief economist Sam Khater. “Consequently, mortgage rates dropped early this summer and have stayed steady despite increases in inflation caused by supply and demand imbalances. The net result for housing is that these low and stable rates allow consumers more time to find the homes they are looking to purchase.”
The 15-year fixed-rate mortgage also saw a slight increase, up to 2.19% from last week’s 2.18% average and 2.37% at this time last year.
Meanwhile, the five-year Treasury-indexed hybrid adjustable-rate mortgage dropped one basis point week over week to 2.42%. The five-year ARM was down from 3.11% a year ago.