A recent uptick in mortgage rates may be showing signs of a reversal after new data from Freddie Mac reveals a second straight week of declines.
According to the company's Primary Mortgage Market Survey, the average 30-year fixed mortgage rate dipped by nearly ten basis points to 3.04% for the week ending April 15, compared to 3.13% the prior week and 3.31% a year ago.
Meanwhile, the 15-year fixed mortgage rate stood at 2.35%, compared to 2.42% the prior week and 2.80% a year ago, and 5-year Treasury-indexed hybrid adjustable-rate mortgages stood at a rate of 2.8%, compared to 2.92% a week ago and 3.34% a year ago.
Despite a rise in Consumer Price Data and improving economic trends in home construction and jobs, bond yields have pulled back from previous highs.
Freddie Mac Chief Economist Sam Khater said that the economy appears to be improving on the demand side, but that the supply of a variety of goods and materials remain scarce.
"As a result of this imbalance, pricing pressures are building and causing inflation to rise," Khater said.
However, the mortgage giant expects a modest increase for the remainder of the year, forecasting 30-year rates of 3.2% in 2021 and 3.7% in 2022.
Additionally, Freddie Mac's quarterly forecast estimates house price growth to be 6.6% in 2021, before slowing to 4.4% in 2022. Home sales are expected to reach 7.1 million in 2021 and fall to 6.7 million homes in 2022.
Meanwhile, purchase originations are expected to increase to $1.7 trillion in 2021 before dropping to $1.6 trillion in 2022 and refinance originations are expected to be $1.8 trillion in 2021 before falling to $770 billion in 2022.
Overall, annual mortgage origination levels are expected to be $3.5 trillion in 2021 and $2.4 trillion 2022.
The mortgage giant's recent analysis of the U.S. housing market found a 3.8 million shortfall of single-family needed to meet the country's demand, according to the Wall Street Journal, representing a 52% rise in the nation's home shortage compared with 2018.