Mortgage rates inch marginally higher, September rates seen around or below 3%

• While the economy continues to grow, it has lost momentum over the last two months due to the current wave of new COVID cases that has led to weaker employment, lower spending and declining consumer confidence," Freddie Mac’s Chief Economist Sam Khater commented.
• 30-year fixed-rate mortgage averaged 2.88% for the week ending Sep 9, up from 2.87% in prior week and up from 2.86% averaged in same period a year ago, according to the Freddie Mac Primary Mortgage Survey.
• 15-year FRM averages 2.19% marginally up from last week when it averaged 2.18% and down from 2.42% in year ago.
• 5-year Treasury-indexed hybrid adjustable rate mortgage averaged 2.42%, down from 2.43% in prior week, and lower from 3.11% a year ago.
• "Consequently, mortgage rates dropped early this summer and have stayed steady despite increases in inflation caused by supply and demand imbalances. The net result for housing is that these low and stable rates allow consumers more time to find the homes they are looking to purchase." Khater added.
• Mortgage Bankers Association’s seasonally adjusted index indicated a drop of 1.9% in total mortgage application volume in last week compared with the previous week.
• Mortgage application volume fell to the lowest level since mid-July, declining 1.9% for the week ending Sep. 3.
• "Refinance volume has been moderating, while purchase volume continues to be lower than expected given the lack of homes on the market," MBA’s chief economist Mike Fratantoni commented.
• Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors, agrees that mortgage rates will show little movement in September, likely remaining around or below 3%.
• "Although officials at the Fed are discussing cutbacks to their bond purchases, I don’t see it coming before November. In the meantime, home prices have reached new record highs, making even more difficult the transition to homeownership for many renters," Nadia further adds.
• Daryl Fairweather, chief economist for Redfin in Milwaukee, also foresees rates remaining relatively unchanged through September.
• Q4 forecast:  MBA expects the 30-year fixed-rate mortgage averaging 3.3% over the last three months of 2021; Freddie Mac’s most recent outlook pegs rates closing out the year at 3.1%, while Fannie Mae has a more generous forecast for borrowers: a 2.9% average rate over the remainder of 2021. Evangelou believes rates will average 3.2% for the rest of 2021.