Interest Rates Stay Flat, But Mortgage Applications Rise
Interest rates remained steady this week, according to Freddie Mac. The average rate on a 30-year fixed-rate loan was 2.88%, up just slightly from last week’s 2.86%.
Mortgage applications, on the other hand, saw a much bigger fluctuation. According to the Mortgage Bankers Association, overall mortgage application activity was up 4.9% over the week. Purchase loans were up 2%, hitting their highest point since April.
“There was a resurgence in mortgage applications the week after Labor Day, with activity overall at its highest level in over a month,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale.”
Refinance activity jumped a whopping 7% for the week, driven largely by upticks in the FHA and VA sectors. Overall, refinances accounted for 66.2% of all loan activity — up from 64.9% last week.
More in mortgage & housing news
- Mortgage applications to purchase a new home were up last month, according to MBA. New home mortgage activity jumped 9% from July to August. Over the year, though, applications were down, falling 17% since August 2020.
- The Census Bureau released its monthly residential construction data, and housing starts are showing marked improvement. According to the release, starts are up nearly 4% for the month and 17% over the year. Permits — an indicator of future activity — rose 6% for the month and 13.5% for the year.
- Demand for second homes fell in August, decreasing 19.3% over the year, Redfin says. It was the third straight month of declines.
- Existing home sales dropped 2% from July to August and 1.5% compared to last year. Median home prices still rose, though, with a 15% uptick compared to last year.
- The share of mortgage loans in forbearance fell to 3% this week, down from 3.08% last week. About 1.5 million homeowners are still in forbearance.
This week in mortgage rates
Mortgage rates were steady this week, increasing just slightly on 30- and 15-year fixed-rate loans and dropping 8 basis points on 5/1 ARMs.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 2.88% (up from 2.86%)
- 15-year, fixed-rate loans: 2.15% (up from 2.12%)
- 5/1 adjustable-rate loans: 2.43% (down from 2.51%)
Make sure to check back here next week for the latest mortgage rates and news.
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