Mortgage rates remain largely flat amid rebound in new COVID cases

• “It’s Groundhog Day for mortgage rates, as they have remained virtually flat for over two months. The holding pattern in rates reflects the markets’ view that the prospects for the economy have dimmed somewhat due to the rebound in new COVID cases,” said Sam Khater, Freddie Mac’s Chief Economist.
• 30-year fixed-rate mortgage averaged 2.86% for the week ending Sep 16, down marginally from 2.88% in prior week and down from 2.87% averaged in same period a year ago, according to the Freddie Mac Primary Mortgage Survey.
• 15-year FRM averages 2.12% down from last week when it averaged 2.19% and down from 2.35% in year ago.
• 5-year Treasury-indexed hybrid adjustable rate mortgage averaged 2.51%, up from 2.42% in prior week, and lower from 2.96% a year ago.
• Khater further noted that “While our collective attention is on the pandemic, fundamental changes in the economy are occurring, such as increased migration, the extended continuation of remote work, increased use of automation, and the focus on a more energy efficient and resilient economy. These factors will likely lead to significant investment and new post-pandemic economic models that will spur economic growth.”
• According to the Realtor.com's Best Time to Buy Report, between Sept. 12 and Oct.17, the majority of markets across the country will hit their home buying sweet spot with more homes for sale, lower prices and less buyer competition compared to the average week of the year.
• "Home prices peaked in the summer, and new listings continue to come on the market helping slow the pace of sales -- which is good news for homebuyers," said Danielle Hale, chief economist, Realtor.com
• Hale further added that "As families across the country focus on getting back into school routines, there are fewer buyers in the market, creating a great opportunity especially for first-time homebuyers to make a purchase with somewhat less competition."
• Mortgage loan application volume rose by 0.3% for the week ending Sept. 10, up from the prior week, according to the Mortgage Bankers Association’s weekly report.
• "Purchase applications - after adjusting for the impact of Labor Day - increased over 7 percent last week to their highest level since April 2021. Compared to the same week last September, which was right in the middle of a significant upswing in home purchases, applications were down 11 percent - the smallest year-over-year decline in 14 weeks," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.
• Kan further noted that "While the 30-year fixed rate was unchanged at just over 3 percent, it was not enough to drive more refinance activity. Refinance applications slipped to their slowest pace since early July, and the refinance share of applications fell to 65 percent, which was also the lowest since July."