Interest Rates Stay Flat, But Mortgage Applications Rise

Mortgage Weekly Update

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:

Make sure to check back here next week for the latest mortgage rates and news.

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By Aly Yale / September 23rd, 2021 / Categories: / Tags:

Aly Yale

Aly J. Yale is a freelance writer focusing on real estate, mortgage, and the housing market. Her work has been featured in Forbes, Bankrate, The Motley Fool, Business Insider, The Balance, and more. Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from Texas Christian University's Bob Schieffer College of Communication with a major in radio-TV-film and news-editorial journalism. Connect with her at or on Twitter at @AlyJwriter.