Mortgage Rates Drop Again!
WASHINGTON (AP) — Mortgage rates were flat to lower this week, with the average for the key 30-year home loan below 3% for the sixth straight week.
Uncertainty over the surging delta coronavirus variant and its potential effect on the U.S. economic recovery remained as a backdrop suppressing mortgage rates.
Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year mortgage fell to 2.77% from 2.80% last week. The benchmark rate, which reached a peak this year of 3.18% in April, stood at 2.88% a year ago.
The rate for a 15-year loan, a popular option among homeowners refinancing their mortgages, remained at a historically low 2.10%.
Concerns have been mounting in global financial markets around the delta variant’s spread in the U.S., Europe and Asia, and especially in China, which is on high alert as it confronts hundreds of fresh cases.
China has sealed off residential communities, suspended flights and trains, and ordered mass coronavirus testing in Wuhan, the city where the disease was first detected in late 2019. Although China’s numbers are small compared with outbreaks elsewhere, its containment strategies and the subsequent impact on its large economy are being closely watched.
In the latest evidence of a briskly rebounding U.S. economy and job market, the government reported Thursday that the number of Americans applying for unemployment benefits fell last week by 14,000, to 385,000. Benefits applications have mostly fallen steadily since topping 900,000 in early January. Still, they remain high by historic levels.
- The average contract interest rate for 30-year fixed-rate mortgages decreased to 3.15% from 3.17%.
- Applications for a mortgage to purchase a home were essentially flat from the previous week and 24% lower than one year ago.
Mortgage rates fell slightly
Mortgage rates fell slightly last week, but not enough to light a fire under mortgage demand.
Total mortgage application volume decreased 3.1% for the week, according to the Mortgage Bankers Association’s seasonally adjusted index.
While rates fell slightly, they were not as low as the record levels we saw last fall, and that is why refinancing demand is not responding. Refinance applications fell 5% last week and were 27% lower than a year ago. The refinance share of mortgage activity decreased to 60.4% of total applications from 61.3% the previous week.
Applications for a mortgage to purchase a home were essentially flat from the previous week and 24% lower than a year ago.
It was also the result of sky-high home prices. Fewer buyers can now afford a home. This was apparent in the average loan size for purchase applications. It fell to $407,000, below the record $418,000 set in February, but still far above 2020′s average of $353,900.
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