Mortgage rates

While the Freddie Mac survey found the 30-year fixed fell 11 basis points, other indicators, including the 10-year Treasury yield, have all increased.

Short-term rate cuts often don't immediately translate to lower financing costs for 30-year home loans, and there are some unique circumstances this time.

Fannie Mae's economists are pessimistic about the future for existing home sales, reducing its purchase volume outlook in both 2024 and 2025.

Asked about inflation risks ahead, she pointed to the impact of housing on the consumer price index, describing it as the "stickiest piece." Stripping out housing, the U.S. consumer price index is only rising about 1.8%, she said.

The 30-year fixed rate mortgage fell week-to-week by the largest amount since the start of August and are now almost a percentage point lower than a year ago, according to Freddie Mac.

The latest inflation news is almost sure to result in a 25 basis point cut next week, but some are still hoping for 50 basis points, as well as reductions totaling almost 200 basis points through the end of 2025, Wolters Kluwer found.

Mortgage originators are adding more refinance-specific products, as rate locks continued to rise in August.

The 10-year Treasury yield was down by 10 basis points from a week ago, but Freddie Mac reported no movement in mortgage rates while other sources found that they were down by 7 basis points.

But the purchase business that brings in three times the fee size as refinancings will be the driver of the improvement for the publicly traded title underwriters.

Servicers saw their retention rate fall to the second-lowest level in 17 years, according to ICE Mortgage Technology.

Recent rate movements have failed to result in significant purchase growth, but refinances are providing lenders some lift.

About 85% of U.S. homeowners have interest rates below 6%, while a little over 50% of homeowners have a rate below 4%, Redfin's report said.

The Federal Reserve Chair's words were enough to send Treasury yields and the dollar lower and stocks higher on Friday as investors perceived a green light to take on risk. 

Two Federal Reserve officials said they believe it's appropriate for the U.S. central bank to begin lowering interest rates soon, and that the pace of subsequent cutting should be "gradual" and "methodical."

The 30-year fixed rate mortgage is lingering just shy of 6.5% level, which is not low enough to bring home purchasers back into the market, observers said.

Industry economists are now confident about predictions for mortgage rate movements through the end of next year; the question is if that translates to increased home sales.

Purchase applications last week fell to their lowest level since February, the Mortgage Bankers Association reported.

While other indicators all reported the 30-year fixed rate mortgage was lower on a week-to-week basis, Freddie Mac's survey increased for the first time in three weeks

Mortgage rates, already easing, should keep falling as inflationary pressure cools during the rest of the year, but a pair of wild cards could upset the prediction.

Nearly two-thirds of consumers in a July survey said they expect mortgage rates to decline soon, but most want to see them cross a very specific threshold before they act, Mphasis Digital Risk found.