Mortgage rates slip to another all-time low as stock market drops
Mortgage rates fell 7 basis points this week to yet another record low in the 49-year history of the Freddie Mac Primary Mortgage Market Survey, as stock market indicators sank during the period.
"Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery," Sam Khater, Freddie Mac's chief economist, said in a press release. "These low rates have ignited robust purchase demand activity, which is up 25% from a year ago and has been growing at double digit rates for four consecutive months. However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity."
The Dow Jones Industrial Average peaked at 29,095 on Sept. 2 before bottoming out at 27,501 on Sept. 8.
Zillow's own rate tracker, based on offers made through its site, was up slightly over the past seven days after two weeks of record lows.
"A combination of stronger-than-expected job figures last Friday and a surge in borrower demand placed upward pressure on rates late last week, more than offsetting any declines brought upon by losses in the stock markets," said Matthew Speakman, a Zillow economist in a commentary accompanying the release of its rate tracker on Wednesday. "The delayed rollout of the Federal Housing Finance Agency's price adjustment on mortgage refinances — announced two weeks ago — sparked a surge in application volume and forced lenders to boost rates slightly to maintain control of their pipelines."
The 30-year fixed-rate mortgage averaged 2.86% for the week ending Sept. 10., down from last week when it averaged 2.93%, Freddie Mac said. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.56%.
The 15-year fixed-rate mortgage averaged 2.37%, down from last week when it averaged 2.42%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.09%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.11% with an average 0.2 point, up from last week when it averaged 2.93%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.36%.
Mortgage rates are in line for even larger increases in the not-so-distant future, driven by the adverse impact fee effect on pricing.
"While this week's uptick in rates was modest, more substantive increases may be on the horizon in the coming weeks," Speakman said. "For example, the reapplication of the aforementioned FHFA price adjustment will impact rates sooner than people think. Even though the adjustment won’t officially be imposed until Dec. 1, lenders are likely to start applying it to loans as soon as October, meaning the adjustment's impact will likely show up in rate quotes in as little as a few weeks."