Mortgage Rates Hold Steady, But Buying, Refi Activity Still Dips

Mortgage Weekly Update

Mortgage rates stayed steady this week, clocking in at 2.86% — a mere 1 basis point decrease compared to last week’s numbers. 

Despite the low rates, though, both buying and refinancing activity slowed. According to the Mortgage Bankers Association, applications to purchase a home were down 1%, while refinancing applications dipped 5%.

“Housing is in a similar phase of the economic cycle as many other consumer goods,” said Sam Khater, Freddie Mac’s chief economist. “While there is strong latent demand, low supply has caused prices to rise as shortages restrict the amount of sales activity that otherwise would occur.”

Refinances accounted for 67.3% of all mortgage activity for the week, down from 68% previously. FHA applications increased (from 8.9% of all loans to 9.4%), as did VA loans, which now account for 10.3% of all activity.

According to Joel Kan, MBA’s associate vice president of economic and industry forecasting, this could indicate more first-time homebuyers are hitting the market.

“Government purchase loans, such as FHA loans, are typically popular with first-time buyers,” Kan said.

More mortgage and housing news

  • According to Realtor.com’s weekly report, median listing prices are now up just 8.6% over the year. It’s the third straight week that gains have been in the single digits, breaking a nearly year-long streak of double-digit increases. 
  • Redfin data shows that 5% of home sellers have dropped their price in the last month — the highest share in almost two years.
  • The Census Bureau released the latest residential construction numbers this week, and the news is largely good. Both permits and completions jumped (over the year and compared to last month), while housing starts were a mixed bag. Starts were 7% below June’s numbers, but 2.5% higher than July 2020. 
  • A study from CoreLogic shows the pandemic sped-up home buying plans for many young Millennials — those under age 35. According to the report, young millennial home purchases jumped nearly 16% in 2020.

This week in mortgage rates

Mortgage rates held steady across all loan types this week, fluctuating by just one basis point across the board. 

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 / August 19th, 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 AlyJYale.com or on Twitter at @AlyJwriter.