Mortgage Rates Reverse Course, But Buyers, Refinancers Charge Ahead
Mortgage rates have increased for the first time in six weeks, according to the latest data from Freddie Mac. Now, the average rate on a 30-year, fixed-rate mortgage sits at 2.87% — up from last week’s 2.77%.
“Following last Friday’s strong jobs report, which revealed broad-based gains in employment and wage growth, mortgage rates are moving higher,” said Sam Khater, Freddie Mac’s chief economist. “Despite the rise, rates remain very low, particularly given that economic growth is strong and will continue into next year.”
Khater is right: Rates are still extremely low by historical standards. In November 2018 — less than three years ago, rates on 30-year loans hovered just under 5%.
It seems consumers have a good memory, and regardless of this week’s uptick in rates, many moved to buy or refinance a house. According to the Mortgage Bankers Association, mortgage application volume was up 2.8% this week. Purchase loan activity jumped 2%, while refinances rose 3%.
“Mortgage applications rebounded last week, including an increase in purchase applications for the first time in nearly a month,” said Joel Kan, associate vice president of economic and industry forecasting at MBA. “Homeowners continue to respond to lower rates, with refinance activity climbing to the highest level since February 2021.”
Overall, refinances accounted for 68% of all mortgage activity this week.
More in mortgage & housing news
- Fannie Mae announced it will allow lenders to automatically factor a borrower’s past rent payments into underwriting decisions. The change went into effect Wednesday.
- Data from MBA shows that lending standards loosened a bit in July, with the overall Mortgage Credit Availability Index rising just slightly over June. Jumbo loan standards relaxed the most, with a 3.8% uptick.
- Realtor.com reported a 6.5% increase in new listings for July, with a notable jump in homes on the smaller end of the spectrum. Nearly a third of all newly listed homes were in the 750 to 1,750 square-foot range.
This week in mortgage rates
Mortgage rates fell on all three major mortgage products this week.
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 2.87% (up from 2.77%)
- 15-year, fixed-rate loans: 2.15% (up from 2.10%)
- 5/1 adjustable-rate loans: 2.44% (up from 2.40%)
Make sure to check back here next week for the latest mortgage news.
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