Mortgage Rates Rise Slightly, While Applications Slip

Mortgage Weekly Update

Mortgage rates ticked up slightly this week, sending applications both to purchase a home and refinance one downward.

According to Freddie Mac, the average rate on 30-year, fixed-rate loans was 2.99% this week, up from 2.95% the week prior. As a result of the uptick, the Mortgage Bankers Association reported a 3% decrease in purchase applications and a 5% decrease in refinancing.

“Mortgage applications decreased for the second week in a row, with the overall index reaching its lowest level since February 2020,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity.”

Homebuyer demand for government-backed loans — including USDA, VA, and FHA mortgages — also declined for the week.

“The government purchase index declined to its lowest level in over a year and has now decreased year-over-year for five straight weeks,” Kan said. “Purchase applications were down almost 2% from a year ago, but that was compared to the week of Memorial Day 2020.”  

More in mortgage & housing news

  • The number of mortgage loans in forbearance fell to 4.19% for the week, according to MBA. About 2.1 million homeowners are still on a mortgage forbearance plan.
  • Fannie Mae and Freddie Mac have extended mortgage forbearance options for multifamily borrowers through September 30. They were previously set to expire this month.
  • New data from Realtor.com shows that homes are selling over a month faster than this time last year. Sale time declined the most in Pittsburgh, Detroit, and Rochester, N.Y. Redfin data shows that 57% of homes sold are under contract within two weeks, and 44% are under contract within one.
  • Over half of homes listed are selling for above listing price, according to Redfin. That’s up from just one in four a year ago.

This week in mortgage rates

Mortgage rates increased or held steady on all loan products this week.

Here’s how rates looked for each loan type:

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

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By Aly Yale / June 4th, 2021 / Categories: / Tags:

Aly Yale

Aly J. Yale is a mortgage and real estate writer based in Houston. Connect with her at AlyJYale.com or on Twitter at @AlyJwriter.