Mortgage Rates Increase Slightly

The average 30-year fixed-rate mortgage rose slightly to 3.21% in Freddie Mac’s latest Primary Mortgage Market Survey. 

“The rebound in homebuyer demand continued this week, driven by mortgage rates that hover near record lows,” said Sam Khater, Freddie Mac’s Chief Economist. “This turnaround in demand, particularly by those who have higher incomes than the typical household, also reflects deferred sales from the Spring.”

This week’s reading is a slight uptick from the prior weeks’ 3.18% but down from last years’ 3.82%. The average rate for a 15-year fixed-rate mortgage was2.62%—unchanged from the prior week. The average 15-year rate is down from 2019’s 3.26%. 

The Mortgage Bankers Association (MBA) revealed mortgage applications rose 9.3% weekly for the week ending June 5. 

Purchase applications continued its run of success, rising week-over-week by 15% and annually by 13%. 

"Fueled again by low mortgage rates, pent-up demand from earlier this spring, and states reopening across the country, purchase mortgage applications and refinances both increased. The recovery in the purchase market continues to gain steam, with the seasonally adjusted index rising to its highest level since January. Purchase activity increased for the eighth straight week and was a notable 13% higher than a year ago," said Joel Kan, MBA's AVP of Economic and Industry Forecasting. "Refinances moved higher for the first time in nearly two months, with both conventional and government applications rising and the overall index coming in 80 percent above year-ago levels."

Refinances accounted for 61.3% of total applications, which is an increase from the prior weeks 59.5%. 

The MBA stated the Federal Housing Administration share of total applications rose to 11.5% from the previous weeks’ 11.2%. The VA share of total applications increased to 12.3% from 12.% the week prior. 

Frank Martell, President and CEO of CoreLogic, said Q1 2020 was “one of the strongest quarters for U.S. mortgage performance in recent history” in the latest Loan Performance Insight Report. 

The build-up in home equity over the past several years, government stimulus programs, and lower borrowing costs have helped cushion homeowners from the initial financial shock of the pandemic and kept widespread delinquencies at bay during the first months of the recession,” Martell said. “Looking ahead, we can expect a more widespread impact on U.S. delinquency rates as the economic toll of elevated unemployment and shelter-in-place orders becomes more evident.”