Freddie Mac just released findings from its Primary Mortgage Market Survey (PMMS). Survey results reveal that the 30-year fixed-rate mortgage (FRM) averaged nearly 3%. This is up just a bit from last week’s percentage, which averaged 2.96%. Although increasing since last week, the 30-year FRM from a year ago was much higher (3.55%).
As purchase housing demand continues to heat up, it is providing a welcome boon to the economy, which has definitely taken a hit during the pandemic. Also worth of note is that fact that this impressive uptick experienced in home sales likewise caused a swift rise in the demand for remodeling and home furnishings. The reason behind this was that consumers are increasingly desiring to renovate and improve their places of residence while spending so much more time at home due to the COVID social distancing restrictions that have led to homeschooling and working remote from home offices.
Sam Khater, Freddie Mac’s Chief Economist, further commented on this current trend: “Purchase housing demand continues to accelerate, ultimately providing support to an economy that otherwise has stagnated. The surge in sales led to a rapid increase in the demand for remodeling and home furnishings as consumers look to renovate while adjusting to home life during COVID.”
Other highlights from the report findings included that the 15-year fixed-rate mortgage averaged 2.54%, an uptick from the previous week’s average of 2.46%. As for one year ago, the 15-year FRM averaged 3.03%. Also revealed was date regarding the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM), which averaged 2.91%, revealing an uptick from last week’s 2.90% average. As for the 5-year ARM from exactly one year ago at this time, it averaged 3.32%.
Realtor.com senior economist, George Ratiu offered his expert insight into what drove these statistics: “Today’s Freddie Mac report shows the 30-year fixed mortgage rate rose another 3 basis points in the wake of last week’s 8 basis point jump to 2.99%. The rates advanced because the U.S. Treasury issued a large number of new notes and investors are eyeing hopeful updates on COVID vaccine trials. However, the economic recovery is moving at a slow pace, as this morning’s jump in initial unemployment insurance above 1.0 million claims illustrated.”
Ratiu added: “Mortgage rates remain well below year-ago levels, and near historic record lows, offering fuel to real estate markets. Demand for homes is surging, with buyers driving activity in suburban markets, as well as second home and vacation destinations. On the flip side, the supply of homes remains bottled up, as sellers are competing with buyers for a shrinking inventory. The imbalance is driving prices steeply upward, with realtor.com’s latest weekly data showing a 10.1 percent jump in listing prices. The only tangible solution would be a sharp increase in new construction, across a wider range of price categories. While builders have ramped up production, they remain hampered by rising lumber and labor costs.”