Freddie Mac’s Primary Mortgage Market Survey (PMMS) was recently released, reporting that the 30-year fixed mortgage rate (FRM) averaged 2.88®.
Mortgage details:
– 30-year fixed-rate mortgage averaged 2.88% with an average 0.7 point for the week ending Sept. 23, 2021, up slightly from last week when it averaged 2.86%. Last year, the 30-year FRM averaged 2.90%.
– 15-year fixed-rate mortgage averaged 2.15% with an average 0.6 point, up from last week when it averaged 2.12%. Last year, the 15-year FRM averaged 2.40%.
– 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.43% with an average 0.3 point, down from last week when it averaged 2.51%. Last year, the 5-year ARM averaged 2.90%.
The takeaway:
Recent moves from the Federal Reserve suggest that interest rate hikes could occur as early as next year instead of 2023 as some forecasts have shown. While economic progress through stimulus activity is still being prioritized, experts say that by November, the Fed could slow down, beginning to moderate the pace of asset purchases and considering rate increases.
“The slowdown in economic growth around the world has caused a flight to the quality of the U.S. financial markets. This has led to a rise in foreign investor purchases of U.S. Treasuries, causing mortgage rates to remain in place, despite the increasing dispersion of inflation across different consumer goods and services.”
“On the housing front, homebuyers continue to snap up available inventory, which has improved modestly, and home price growth is moderating. However, the next few months will be choppy as several home builders are signaling that they are going to deliver less supply amid labor and materials shortages.” — Sam Khater, Chief Economist, Freddie Mac
“The Freddie Mac fixed rate for a 30-year loan rose two basis points to 2.88% this week as investors anxiously awaited clarity from the Federal Reserve amid a broad market selloff early in the week. The 10-year Treasury has been bouncing up and down in a narrow band for the last few weeks, which kept rates steady. Yesterday’s announcement from the FOMC reiterated that the Fed will maintain monetary stimulus through a low target rate. However, the Fed also clarified that it will begin tapering its $120 billion a month in Treasury and mortgage-backed securities purchases, signaling that it views the economic outlook with guarded optimism. Markets are likely to price in expected tapering as indications of a timeline crystallize, which means that the days of sub-3% mortgage rates may be in the rear-view mirror by the end of 2021.
“For real estate markets, 2021 has been a year of record-high prices fueled in part by record-low mortgage rates. Moving into the last quarter of the year, the Fed’s stated intent to cut back on asset purchases is likely to begin nudging rates higher. The move will likely be gradual, giving buyers time to take advantage of still-favorable rates amid a growing number of homes for sale.” — George Ratiu, Manager of Economic Research, realtor.com®
