Rates Stay Low, but Purchase Applications Drop
Mortgage rates remained well below 3% this week, clocking in at a mere 2.8% according to Freddie Mac. On 15-year loans, the average rate was just 2.1% — the lowest point ever recorded.
“As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all time,” said Sam Khater, chief economist at Freddie Mac. “Largely due to the current environment, the 30-year fixed-rate remains below 3% for the fifth consecutive week while the 15-year fixed-rate hits another record low.”
The low rates sent refinances upward, which saw a 9% jump over the week. Purchase loan applications, however, fell 2% for the week and are now down 18% over the year. Purchase applications are now at their lowest point since last May.
“Potential buyers continue to be put off by extremely high home prices and increased competition,” said Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association. “The FHFA reported yesterday that May home prices were 18% higher than a year ago, continuing a seven-month trend of unprecedented home-price growth.”
All in all, refinances made up 67.2% of all loan applications, up from 64.9% the week prior. Refinances on conventional loans saw the biggest jump, with an increase of 11%.
More in mortgage & housing news
- Both the CDC’s eviction moratorium and the ban on foreclosures are set to expire this week. For homeowners and tenants still struggling, mortgage forbearance and rent assistance programs are still available.
- New home sales are slipping. According to Realtor.com, purchases of new construction properties fell 6.6% between May and June and are now down almost 20% from one year ago.
- Investor home purchases hit a new record last quarter, snapping up nearly $49 billion in properties. That’s up 15.1% over the quarter and 106% over last year.
This week in mortgage rates
Mortgage rates fell on 15-year loans and 5/1 ARMs, but increased just slightly on 30-year mortgages (up 2 basis points).
Here’s how rates looked for each loan type:
- Conforming 30-year, fixed-rate loans: 2.8% (up from 2.78%)
- 15-year, fixed-rate loans: 2.12% (down from 2.22%)
- 5/1 adjustable-rate loans: 2.49% (up from 2.47%)
Make sure to check back here next week for the latest mortgage news.
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