Economic research

Mortgage rates are roughly stable at 2.87%

Freddie Mac Mortgage Rate August 26, 2021
What happened this week:

Mortgage rates rose just 1 basis point to 2.87% in data this week from Freddie Mac, marking the third consecutive week of relative stability. As the stock market hits new highs and investors continue to digest the minutes of the Fed’s July meeting while awaiting Chairman Powell’s speech on Friday, there have been no major surprises that would trigger a big move. .

What does that mean:

Data on both Sales of existing houses and new home sales in July showed that the housing market behaved broadly as expected, with a slight recovery during the month but much less momentum than last winter’s peak of activity. The number of houses for sale remains low despite recent stock improvements and house prices continue to rise, albeit at a slower pace. Investors are waiting for a reason to move in a new direction and while we can get it from Fed Chairman Powell’s speech on Friday, it’s more likely that incoming data this fall will be what moves rates. Rates will start to climb if we continue to make progress in the fight against the pandemic, which would suggest the economy will remain on track, and while less likely, rates could weaken if COVID cases continue to rise.

For homebuyers, while the mortgage rate backdrop is important, the biggest challenge remains finding a home among scarce options. A steady increase in the number of homeowners deciding to sell will bring welcome relief and will likely allow more buyers to take advantage of still low mortgage rates. Although we have seen a smaller increase in new registrations this week as students return to school across the country, we expect this decline to be temporary, which means better options for buyers. house in the coming months.

Danielle HaleDanielle Hale

Danielle Hale