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Mortgage Rates Near Record Lows

There was a boost in the 30-year-fixed-rate-mortgage, which averaged 2.93% with an average 0.8 point for the week ending September 3, according to FreddleMacIt’s an uptick from last week, when it averaged 2.91%. The 30-year FRM averaged 3.49% a year ago at this time.   

Meantime, the 15-year fixed-rate mortgage averaged 2.42% with an average 0.8 point. It’s a descent from the previous week’s average of 2.46%; at this juncture a year ago, the 15-year FRM averaged 3.00%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.93% with an average 0.2 point—a spike from the previous week’s average, 2.91%. The 5-year ARM averaged 3.30% from this point a year ago. 

“Mortgage rates have remained effectively flat or at near record lows for the last month,” said Sam Khater, Freddie Mac’s Chief Economist. “However, there are some interesting compositional shifts as the 10-year Treasury rate has increased modestly over the past month while mortgage spreads have declined. Spreads may decline even further but the rise in Treasury rates will make it difficult for mortgage rates to fall much more over the next few weeks.” 

Added Realtor.com's Senior Economist, George Ratiu“Today’s Freddie Mac report shows the 30-year fixed mortgage rate slid. This is because bond investors are keeping rates low as they balance the trickle of positive economic data with the continued flow of looming concerns.” 

 As they have been, low mortgage rates are a strong spark for real estate markets; they stimulate demand and ensure purchase activity continues unabated, he said. “Yet, as temperatures begin to cool, a cocktail of quickly dwindling inventory and aggressive price growth are outpacing the financial ability of buyers to secure a home. Not only that, the rebound in employment is unfolding slower than expected, putting a crimp in the acceleration of wages,” continued Ratiu. Although those who remain on a payroll have salted more away over the past few months, year-over-year, housing prices have parachuted 10.3%, surpassing strides in incomes, which has hindered the boost generated by low-cost financing, he added.  

“Mortgage rates have remained effectively flat or at near record lows for the last month,” said Sam Khater, Freddie Mac’s Chief Economist. “However, there are some interesting compositional shifts as the 10-year Treasury rate has increased modestly over the past month while mortgage spreads have declined. Spreads may decline even further but the rise in Treasury rates will make it difficult for mortgage rates to fall much more over the next few weeks.” 

In June, mortgage rates spiraled to a new all-time low, reportedly. The 30-year-fixed-rate mortgage hit 3.13% in Freddie Mac’s Primary Mortgage Market Survey. 

“While the rebound in the economy is uneven, one segment that is exhibiting strength is the housing market. Purchase demand activity is up over twenty percent from a year ago, the highest since January 2009. Mortgage rates have hit another record low due to declining inflationary pressures, putting many homebuyers in the buying mood,” said Khater. However, it will be difficult to sustain the momentum in demand as unsold inventory was at near-record lows coming into the pandemic and it has only dropped since then, he continued. 

About Author: Chuck Green

Chuck Green has contributed to the Wall Street Journal, Washington Post, Los Angeles Times, San Francisco Chronicle, Chicago Tribune and others covering various industries, including real estate, business and banking, technology, and sports
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