Mortgage rates are now in the midst of their most stable month of 2021, with rates for 30-year loans changing by 1 basis point or less in each of the last three weeks.

The average rate for a 30-year, fixed-rate mortgage remained unchanged this week at 2.87 percent, the same level they were at during the week ending Aug. 12, according to Freddie Mac’s weekly lender survey.

“Economic growth and the acceleration in inflation have moderated in the last month, giving the markets comfort and leading to a stabilization in mortgage rates,” Freddie Mac Chief Economist Sam Khater said in a news release. “Heading into the fall, home purchase demand is stable, home sales remain firm and above pre-pandemic levels, and inventory of unsold homes is tight but improving modestly. These factors will allow for home price pressures to ease over the remainder of the year.”

For the week ending Sept. 2, 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 2.87 percent with an average 0.6 point, unchanged from last week’s 2.87 percent figure and a bit lower than 2.93 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 2.18 percent with an average 0.6 point, rising from last week’s 2.17 percent and down from a rate of 2.42 percent a year ago. The mark continued a gradual climb for 15-year fixed rate mortgage loans from their all-time low of 2.10 percent set the week ending Aug. 5, 2021, according to records dating to 1991.
  • For 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 2.43 percent with an average 0.3 point, up from 2.42 percent last week and 2.93 percent a year ago. Rates on 5-year ARM loans are still near their lowest levels since at least 2005, resting just above its lowest point of 2.40 percent during the week ending Aug. 5, 2021.

These rates assume borrowers have excellent credit and are prepared to put 20 percent down on a home, according to Freddie Mac’s survey methodology. Borrowers with lower credit scores can expect their interest rates to be higher on average.

The rates for 30-year loans remained remarkably stable in particular in recent weeks, with their last four weekly averages ending up at percentage marks of 2.87, 2.86, 2.87 and 2.87.

The stable environment for mortgage rates coincides with several weeks of statements from the Federal Reserve signaling an eventual scale-back in fiscal stimulus in the coming months.

Lenders provided these rates to Freddie Mac primarily between Monday and Wednesday — days after Fed Chairman Jerome Powell discussed fiscal tapering plans late last week at the Economic Policy Symposium in Jackson Hole, Wyoming.

At the event, Powell confirmed the Federal Reserve is discussing when to scale back $120 billion in monthly bond purchases that have helped keep mortgages and other long-term interest rates low. But he made clear that a decision to taper will not mean the Fed is ready to start raising short-term rates.

“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff,” Powell said, “for which we have articulated a different and substantially more stringent test.”

Email Daniel Houston

homebuying | mortgages
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