Mortgage Rates Rise, Sending Purchase Loans, Refis Downward

Mortgage Weekly Update

Mortgage rates increased this week, averaging 3.09% on 30-year, fixed-rate loans, according to Freddie Mac. That’s up four basis points compared to last week and nearly 30 from this time last year.

“Mortgage rates continued to rise this week due to the trajectory of both the economy and the pandemic,” said Sam Khater, Freddie Mac’s chief economist. 

The increase caused mortgage activity to drop. According to the Mortgage Bankers Association, overall mortgage applications fell 6.3% compared to last week. Purchase loan activity dropped 5%, largely thanks to rising prices and strapped inventory.

“Purchase activity declined and was 12% lower than a year ago — within the annual comparison range that it has been over the past six weeks,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Insufficient housing supply and elevated home price growth continue to limit options for would-be buyers.”  

Refinance applications continued their downward climb this week, too, falling 7% compared to the week prior. Overall, refinances accounted for 63.3% of all mortgage activity, down from 63.9% last week.

“Refinance applications declined for the fourth week as rates increased, bringing the refinance index to its lowest level since July 2021,” Kan said.

More in mortgage & housing news 

  • Applications to purchase a new home fell 4% in September and are now down 16% compared to last year, according to MBA
  • The Federal Housing Finance Agency announced two big news items this week. First, it expanded eligibility for its RefiNow and Refi Possible refinance programs, allowing more moderate-income borrowers to qualify. The agency also made desktop appraisals — a temporary flexibility allowed during the pandemic — a permanent option for Fannie Mae and Freddie Mac-backed loans.
  • The share of loans in forbearance took a big dip this week, falling 34 basis points. Currently, just 2.28% of all mortgage loans — or around 1.1 million homeowners — are on a forbearance plan.
  • Property taxes are up around 13% since just the end of 2020, according to a new analysis. Property owners paid $703 billion in taxes in just Q1 2021 alone.

This week in mortgage rates

Mortgage rates rose on 15- and 30-year loans this week, but fell (by just one basis point) 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.

Information contained in this article may include links or references to third-party resources or content. Embrace Home Loans does not endorse or guarantee the accuracy of this third-party information. If you follow these links, you will be linking to a third-party website not operated by Embrace. We are not responsible for the content of that website and its privacy & security policies may differ from those practiced by Embrace.

​This information is distributed for professional use and is not intended to be shared with, or viewed by, consumers. To the average consumer, the information here may be misleading or exclude important disclosures

Share this:
By Aly Yale / October 21st, 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.