Mortgage rates were unchanged as the markets await what Federal Reserve Chairman Jerome Powell will say on Friday.
At the same time, a 10-basis point rise in the 10-year Treasury between Aug. 13 and Aug 18 was partially reversed by two days later in
The 30-year fixed rate mortgage remained at 6.58% for the week of Aug. 21, according to the Freddie Mac Primary Mortgage Market Survey. For
"Over the summer, rates have come down and purchase applications are outpacing 2024, though a number of homebuyers continue waiting on the sideline for rates to further decrease," said Sam Khater, Freddie Mac chief economist, in a press release.
Meanwhile, the 15-year FRM dropped 2 basis points
"Mortgage rates show signs of easing below 6.5% as conviction strengthens for the Fed to cut rates in September, at the same time the 10-year [Treasury] has struggled to drop below 4.25% on decisively mixed inflation data," Eric Hagen of BTIG wrote in an Aug. 21 commentary which came out before the Freddie Mac data.
"We think
At noon on Thursday, the 10-year Treasury yield was at 4.34%, up from Wednesday's close at 4.3%. But after Aug. 14, when the yield closed at 4.24%, it pushed up to 4.34% at the close on Aug. 18.
Hagen noted the mortgage to Treasury spread remains in the area of 250 basis points versus the norm of 175-to-200 basis points. Primary and secondary market spreads also have room to tighten.
"But aside from seeing a more material drop in the 10-year, envisioning mortgage rates getting down into the mid-5's over the medium/longer-term may be most likely driven by the super-scaled originators bringing down origination costs through the application of technology," Hagen said.
Zillow's rate tracker reported the 30-year FRM rose 6 basis points from last week's average to 6.73% as of 11 a.m. on Thursday.
Lender Price data on the National Mortgage News website showed the 30-year FRM at 6.58% at the same time, versus 6.57% one week earlier.
Going forward, the next market moving event will be tomorrow's speech by Powell at the symposium in Jackson Hole, Wyoming, said Kara Ng, Zillow Home Loans senior economist. Notwithstanding what happened this week, mortgage rates had been trending lower as of late, she noted in her commentary.
"With markets already pricing in strong odds of a September rate cut, any hint from Powell that the Fed is not ready to ease policy could spark a reversal in mortgage rates," Ng said.
The Mortgage Bankers Association's Weekly Application Survey for the period ended Aug. 15 found the conforming 30-year FRM 1 basis point higher at 6.68%.
Purchase applications were virtually flat with the previous week on a seasonally adjusted basis. Unadjusted they were down 2% from the previous week but up 23% from one year ago.
Volume for purchase loans was at its strongest pace in four weeks, Bob Broeksmit, MBA president and CEO said in a Thursday morning commentary.
"Housing affordability remains a challenge for many prospective homebuyers, but demand continues to be stronger than last year," Broeksmit said.
Existing home sales grew 2% month-over-month and by 0.8% versus the previous year according to data released Thursday morning by the National Association of Realtors.
Still, "Unless mortgage rates move lower and stay there, the housing market will remain slow and regionally uneven, with locked-in sellers and rising inventory limiting both appreciation and the pace of home sales," said Ruben Gonzalez, the chief economist at Keller Williams.
While mortgage rates are lower than their recent peaks, it doesn't offer much relief to buyers, Gonzalez said. "Sellers are increasingly locked in not only by their low mortgage rates but also by their declining equity positions."
On the other hand, "If mortgage rates continue to trend down in the coming months, building inventory may offer buyers more leverage and choice," Gonzalez said.
