Interest rates on 30-year mortgages fell further as bond markets reacted to the delta variant’s potential impact on the global economy.

Mortgage rates dipped further in the early days of August, with average rates for 30-year loans falling 3 basis points, according to Freddie Mac’s weekly lender survey.

“With global market uncertainty surrounding the Delta variant of COVID-19, we saw 10-year Treasury yields drift lower and consequently mortgage rates followed suit,” Freddie Mac Chief Economist Sam Khater said in a statement. “The 30-year fixed-rate mortgage dipped back to where it stood at the beginning of 2021, and the 15-year fixed remained at its historic low. This bodes well for those still looking to refinance, renovate or even purchase a new home.”

For the week ending Aug. 5, Freddie Mac’s weekly Primary Mortgage Market Survey reported average rates for the following types of loans:

  • For 30-year fixed-rate mortgages, rates averaged 2.77 percent with an average 0.6 point, down from 2.80 percent last week and lower than 2.88 percent a year ago. Rates for 30-year loans hit an all-time low of 2.65 percent during the week ending Jan. 7, 2021, according to records dating to 1971.
  • Rates on 15-year fixed-rate mortgages averaged 2.10 percent with an average 0.6 point, matching last week’s historic low and down from a rate of 2.44 percent a year ago. The mark kept rates for 15-year fixed rate mortgage loans at all-time lows in records dating to 1991, replacing the previous low set July 22, 2021.
  • For 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 2.40 percent with an average 0.4 point, down from 2.45 percent last week and 2.90 percent a year ago. Rates on 5-year ARM loans are at their lowest levels since at least 2005, remaining below a previous low point of 2.56 percent during the week ending May 2, 2013.

Freddie Mac’s weekly survey of home purchase loans assumes a 20 percent down payment and a borrower with excellent credit. Borrowers with lower credit scores may see higher interest rates.

Rates have come down since February and March, when fears of inflation made mortgages temporarily more expensive for borrowers. Since then, however, the rates for 30-year loans have hovered around or below 3 percent. 

Investors are watching the Federal Reserve’s actions closely. If the central bank decides to buy fewer Treasury bills and mortgage bonds in an effort to curb inflation, rates may rise again. 

Email Daniel Houston

homebuying | lenders
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