Mortgage rates continue to move within a very narrow band, as the housing market could be primed for another surge in interest from prospective home buyers.
The 30-year fixed-rate mortgage averaged 2.86% for the week ending Sept. 16, down two basis points from the previous week, Freddie Mac
reported Thursday. Mortgage rates are in line with their level from last year — a year ago, the 30-year loan averaged 2.87%.
The 15-year fixed-rate mortgage dropped seven basis points over the past week to an average of 2.12%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage rose by nine basis points to an average of 2.51%.
“It’s Groundhog Day for mortgage rates, as they have remained virtually flat for over two months,” Freddie Mac chief economist Sam Khater said in the report. “The holding pattern in rates reflects the markets’ view that the prospects for the economy have dimmed somewhat due to the rebound in new COVID cases.”
Part of the problem for investors right now is they can’t make heads or tails of what the Fed’s next move might be — or when it will come. “A softer-than-expected August inflation reading this week likely lowered the odds that the Fed announces any immediate moves to tighten policy at their upcoming September conference, but the fact that interest rates haven’t moved much in recent weeks indicates that investors are still waiting for more certainty,” said Zillow
senior economist Matthew Speakman.
The good news for home buyers and sellers alike is that the housing market appears primed for another unusually busy fall, according to Realtor.com chief economist Danielle Hale.
The number of new listings on the market increased 2% over the past week, a bounce back from the prior week when there was a decline in newly-listed homes. The inventory of homes for sale is still down 22% from a year ago, but the number of homes listed has increased for 21 of the last 25 weeks, giving buyers more breathing room.
Higher prices are what’s luring sellers into the market now, with the median listing price up 9.7% from a year ago.
“The uptick in home prices is uncharacteristic for this time of year, but offers good news for sellers as median listing prices remain near record-highs,” Hale said. “For buyers, the rise in newly-listed homes means more options and possibly even some negotiating power in certain markets, especially with price growth expected to ease back in the weeks ahead.”