For the second consecutive week, mortgage rates managed to hold steady below 3%, rising one basis point last week to 2.98%, according to Freddie Mac’s Primary Mortgage Market Survey.
In light of the rising COVID-19 caseloads globally, U.S. Treasury yields stopped moving up a month ago and have remained within a narrow range as the market responds to incoming economic data, noted Sam Khater, Freddie Mac’s chief economist. While traders typically become hesitant ahead of economic speeches from the Federal Reserve, the FOMC once again did not change its stance on inflation and asset purchases, despite forward economic recovery.
Overall, Fed purchases helped to drive mortgage rates and other loan interest rates to the lowest level on record in 2020 by boosting competition for bonds, which compresses yields.
“The good news is that with rates under three percent, refinancing continues to be attractive for many borrowers who financed before 2020,” Khater said. “But, for eager buyers, especially first-time homebuyers, inventory continues to be extremely tight and competition for available homes to purchase remains high.”
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