Mortgage interest rates held relatively steady for the third consecutive week, increasing just slightly to 2.87%, according to the Primary Mortgage Market Survey from Freddie Mac. This hold is due to a conflict between a recovering economy and a surge in COVID-19 delta variant cases, according to Sam Khater, the mortgage giant's chief economist.
"The tug-of-war between the economic recovery and rising COVID-19 cases has left mortgage rates moving sideways over the last few weeks," Khater said. "Overall, rates continue to be low, with a window of opportunity for those who did not refinance under 3%. From a homebuyer perspective, purchase application demand is improving, but the major obstacle to higher home sales remains very low inventory for consumers to purchase."
The 30-year mortgage’s increase to 2.87% for the week ending Aug. 26, 2021, is up from 2.86% the week before. This is still down from last year’s 2.91%. If you want to see what mortgage interest rate you could get on a mortgage refinance, visit Credible to get your personalized rate.
The 15-year fixed-rate mortgage also increased slightly, from 2.16% last week to 2.17%. This is down from last year’s 2.46%. The five-year Treasury-indeed hybrid adjustable-rate mortgage decreased, falling from 2.43% to 2.42%. This is also down from last year’s 2.91%.
Homeowners can take advantage of these low rates to lower their monthly payments by refinancing. Visit Credible to see multiple options at once and choose the mortgage lender with the best mortgage rates and terms for you.
When will interest rates rise?
Interest rates are holding steady for now, but experts expect they will begin to rise soon, possibly by the end of 2021, and the Federal Reserve could increase the federal funds rate as soon as 2022.
"The number of homes for sale remains low despite recent inventory improvements and home prices continue to go up, albeit at a slowing pace," Realtor.com Chief Economist Danielle Hale said. "Rates will begin to climb if we make continued progress in fighting the pandemic which would suggest that the economy will remain on track, and while less likely, rates could falter if COVID cases continue to increase.
"Data on both existing home sales and new home sales in July showed that the housing market performed largely as expected, with a slight pick-up in the month but momentum notably down from last winter’s peak activity."
If you want to take out a mortgage refinance before interest rates rise later this year, visit Credible to get prequalified in minutes without affecting your credit score.
Benefits of a mortgage refinance
Refinancing a home loan amid historically low interest rates can have several benefits to homeowners, including:
Reducing your interest rate: Current mortgage rates can benefit homeowners and help them save significantly on their monthly payments over the life of the loan. Even borrowers who bought homes at the beginning of the pandemic can benefit from refinancing with a lower interest rate on their loan amount. Check out Credible to view multiple mortgage lenders at once and see which one has the best annual percentage rate for you.
Removing private mortgage insurance (PMI): Mortgage insurance can add up to hundreds of dollars to a monthly mortgage payment. And for loans such as those backed by the Federal Housing Administration (FHA), the only way to remove PMI is through a mortgage refinance. If you are considering refinancing to remove PMI from your FHA loan, contact Credible to speak to a home loan expert and get all of your questions answered.
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