Keep up with current mortgage rates at HousingWire’s Mortgage Rates Center. Rates are updated daily and include data from Freddie Mac and Optimal Blue.

Optimal Blue data is based on actual rate lock transactions and therefore includes borrowers across the credit spectrum. The Freddie Mac Primary Mortgage Market Survey (PMMS) provides the rates available to the best borrowers.

Freddie Mac PMMS 7/9/2020

Rates for a 30-year and 15-year fixed mortgage fell to all-time lows this week as a resurgence in the pandemic caused investors to buy more bonds, including mortgage-backed securities.

The average rate for a 30-year fixed mortgage was 3.03%, down from 3.07% last week. That marks the lowest in a data series that goes back to 1971. The average 15-year rate fell to 2.51%, the lowest in almost 30 years of data.

Mortgage rates fell as investors reacted to news of a record-setting COVID-19 resurgence in some of the nation’s biggest states. The surges erased optimism from last month’s economic reports showing the jobs market recovering quickly from the virus-induced recession.

The low mortgage rates will boost demand for housing, but it’s a delicate balance, said Sam Khater, chief economist of Freddie Mac. Bad economic news pushes mortgage rates down. However, if states are forced to close businesses again and job losses mount, it will eat into the reservoir of people eligible to purchase properties.

“The summer is heating up as record low mortgage rates continue to spur homebuyer demand,” Khater said. “However, it remains to be seen whether the demand will continue if COVID cases rise to the point that it hinders economic growth.”

The resurgence in the pandemic has “already been much worse than we anticipated, and further restrictions will likely be required in some states to bring the virus under control,” the economists led by Goldman Sachs Chief Economist Jan Hatzius said in a report issued on Saturday.

Mortgage rates have fallen as bond investors’ concerns about a surge in forbearances in April and May has subsided. If layoffs spike, those numbers will mount again, said Joel Naroff, president of Naroff Economics.

The beefed-up unemployment provision in the CARES Act, which adds $600 a week to state payouts in an effort to fully replace salaries, is set to expire on July 31.

“If you’re a middle-income household with a job loss, that $600 a week could mean the ability to pay your mortgage and if it goes away it could put pressure on the housing market in terms of either mortgages or rents,” Naroff said.

The Federal Reserve, which rescued the bond markets in March and April by restarting a fixed-asset-buying program used during the 2008 financial crisis, is still purchasing about $4.5 billion of mortgage-backed securities a day, said Walt Schmidt, FTN Financial’s head of mortgage strategy.

“If it weren’t for the Fed, mortgage rates would be a lot higher,” Schmidt said. “The Fed buying MBS is keeping rates low. The Fed can’t control Fannie Mae and Freddie Mac, but it’s controlling what it can.”

PMMS 7/2/2020

Mortgage rates dropped to a new all-time low in the U.S. this week as a resurgence of COVID-19 infections caused investors to pile into the bond markets. The average rate for a 30-year fixed mortgage was 3.07%, the lowest in a data series that goes back to 1971. The average 15-year rate fell to a seven-year low of 2.56%.

Bond yields, used as a benchmark by mortgage investors, have fallen to near-record lows over the last week on news of a resurgence in COVID-19 infections, erasing hopes for a V-shaped recovery that would have the economy rebounding quickly from the virus-induced recession. States including Texas, California and New York have either paused reopening plans or reversed course to stem the spread of COVID-19.

“The spread of the virus is worsening in almost every state,” Goldman Sachs economists said on Tuesday. “Over half of the US has now reversed or placed reopening on hold.”

PMMS 6/25/2020

The average U.S. rate for a 30-year fixed mortgage this week is 3.13%, matching last week’s rate that was the lowest on record.

Mortgage rates remained at the record low as the three most populous U.S. states – California, Texas and Florida – hit new highs for COVID-19 infections, driving money managers to seek fixed-income investments like mortgage bonds in a “flight to safety,” said Keith Gumbinger, vice president of mortgage-data firm HSH Inc.

“With the rising incidents of COVID-19 in some states, there’s definitely a little bit of a shift to safety, a shift into bonds as investors wait to see how the story unfolds,” Gumbinger said.

PMMS 6/18/2020

Mortgage rates in the U.S. tumbled to another all-time low this week as bond investors reacted to reports showing the economy is struggling amid the COVID-19 pandemic.

The average rate for a 30-year fixed mortgage was down to 3.13%, the second time in two weeks the rate set a new low in a data series that goes back to 1971. The average 15-year rate fell to 2.58%, the lowest in seven years.

Bond yields, used as a benchmark for mortgage investors, fell sharply last week as investors reacted to news that COVID-19 infections reached record highs in more than half a dozen U.S. states, erasing optimism from the prior week that the nation would recover quickly from the economic contraction the virus caused.

In addition, testimony from Federal Reserve Chairman Jerome Powell to Congress on Tuesday and Wednesday gave a bleak outlook for the economy, adding to the statements he made last week after the Federal Open Market Committee kept its rate near zero.

PMMS 6/11/2020

The average U.S. rate for a 30-year fixed mortgage rose three basis points to 3.21% this week, not far from the 3.15% all-time low set at the end of May.

Cheap financing has boosted demand for homes as Americans emerge from lockdowns ordered by states in mid-March to combat the spread of COVID-19. A seasonally adjusted index measuring mortgage applications to fund home purchases last week rose to its highest level since January, the Mortgage Bankers Association said in a Wednesday report.

The index measuring purchase applications increased for the eighth straight week, MBA said in its report. On an unadjusted basis, it was 13% higher than a year ago.

“The rebound in homebuyer demand continued this week, driven by mortgage rates that hover near record lows,” said Sam Khater, Freddie Mac’s chief economist. “This turnaround in demand, particularly by those who have higher incomes than the typical household, also reflects deferred sales from the spring.”

PMMS 6/4/2020

The average U.S. rate for a 30-year fixed mortgage rose three basis points to 3.18% this week.

Home financing costs ticked up as the yield on the 10-year U.S. Treasury note, a benchmark for mortgage investors, rose to 0.761% Wednesday, its highest level since early April. Home-loan rates track so-called “long bonds,” as the longer-maturity Treasuries are known, because mortgage-backed securities compete for the same investors.

PMMS 5/28/2020

The average U.S. rate for a 30-year fixed mortgage fell to 3.15% this week, the lowest ever recorded in a Freddie Mac data series that goes back almost five decades.

Rates have fallen after the Federal Reserve began buying mortgage-backed securities to stimulate demand, said Chris Low, chief economist of FHN Financial in New York. The Fed has purchased more than half a trillion dollars of MBS after restarting in March a bond-buying program it used during the financial crisis more than a decade ago.

“The Fed is by far the biggest player in the mortgage markets right now, the biggest buyer of mortgages, and because of that, they have almost complete control over the interest rate,” Low said.

HW ~ July 2020

2020
The Driving Force Behind Mortgage Rates
State of the Economy

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