MORTGAGE RATES CONTINUE UPWARD MOMENTUM
The 30-year fixed-rate mortgage (FRM) averaged 3.14% for the week ending Oct. 28, according to the latest Primary Mortgage Market Survey® (PMMS®) from Freddie Mac. Declining COVID cases and improved consumer confidence, however, are keeping purchase demand strong despite increasing rates.
Mortgage details:
– 30-year fixed-rate mortgage averaged 3.14% with an average 0.7 point for the week ending Oct. 28, 2021, up from last week when it averaged 3.09%. Last year, the 30-year FRM averaged 2.81%.
– 15-year fixed-rate mortgage averaged 2.37% with an average 0.7 point, up from last week when it averaged 2.33%. A year ago at this time, the 15-year FRM averaged 2.32%.
– 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.56% with an average 0.3 point, up from last week when it averaged 2.54%. Last year, the five-year ARM averaged 2.88%.
The takeaway:
“The yield on the 10-year Treasury note has been trending up due to the decline in new COVID cases, increasing consumer optimism, as well as broadening inflation and persistent shortages,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “Mortgage rates are also rising, but purchase demand remains firm, showing that latent purchase demand exists among consumers.”
“Next week’s Federal Reserve FOMC meeting to decide on the next monetary steps will offer more clarity to financial markets about the road ahead. With the Fed expected to announce a tapering of its asset purchases in light of stronger employment and higher inflation, I expect rates to continue rising,” said realtor.com® Manager of Economic Research, George Ratiu, in a statement.
“Real estate markets are showing signs of a new equilibrium, marked by a steady pace of transactions, and more moderate price growth. As more homeowners list their houses for sale, these homes are spending more time on the market. A good number of cities that were fraught with bidding wars earlier this year are finding a calmer housing landscape, where price reductions are bringing sky-high asking prices back down to earth,” added Ratiu. “While the market remains brisk, there are fewer competing offers, and contingencies have returned, both clear signs of a healthier housing market. For buyers, approachable mortgage rates and less competition mean good opportunities to find the right home. Even so, at today’s rate, buyers of a median-priced home will pay an extra $142 toward their mortgage payment compared with a year ago.”