Freddie Mac: Economic growth loses momentum, keeps interest rates low
Mortgage rates held steady amid slower economic growth coming off of August's disappointing jobs report. (iStock)
Mortgage rates held relatively steady this week amid slower job growth, with the 30-year fixed-rate mortgage increasing just one basis point to 2.88% for the week ending Sept. 9, 2021, according to the latest Primary Mortgage Market Survey from Freddie Mac. The mortgage giant's chief economist says rates haven't risen because of a momentum loss in economic growth.
"While the economy continues to grow, it has lost momentum over the last two months due to the current wave of new COVID cases that has led to weaker employment, lower spending and declining consumer confidence," Freddie Mac's Sam Khater said. "Consequently, mortgage rates dropped early this summer and have stayed steady despite increases in inflation caused by supply and demand imbalances. The net result for housing is that these low and stable rates allow consumers more time to find the homes they are looking to purchase."
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TOP US MORTGAGE LENDER SAYS INTEREST RATES LIKELY TO RISE AS JOB NUMBERS INCREASE
Disappointing August unemployment report keeps rates low
Similar to the 30-year mortgage, the average 15-year fixed-rate mortgage increased slightly from 2.18% to 2.19%. This is still down from the 2020 average of 2.37%. The five-year Treasury-indexed hybrid adjustable-rate mortgage decreased from 2.43% to 2.42%; at this time in 2020 it was up by 3.11%. If you want to take advantage of these low rates, visit Credible to compare multiple mortgage lenders.
"The Freddie Mac fixed rate for a 30-year loan was relatively stable again this week, moving up just one basis point to 2.88%," Realtor.com Chief Economist Danielle Hale said. "This steadiness reflects the mixed jobs report that was released before the Labor Day holiday. While the economy continued to add jobs in August, the pace was lower than expected, but the unemployment rate improved nonetheless.
"With little economic data on tap this week, mortgage rates are likely to remain in their holding pattern," Hale said. "However, with inflation a simmering concern, when mortgage rates do begin to move, they will most likely move higher. For homebuyers and refinancers alike, mortgage rates remain favorable, but may not remain so for long."
If you want to refinance your mortgage before annual percentage rates increase by the end of 2021, visit Credible to get preapproved in minutes for a lower interest rate without affecting your credit score.
Housing market remains active moving into autumn
With current mortgage rates holding at historic lows, the housing market is expected to stay strong headed into the fall season.
"Despite a slip in pending home sales, real estate markets remain active heading into the fall as the gap between those saying it’s a good time to buy and those saying it’s good time to sell narrowed slightly, as consumers recognize that we’re entering a more balanced market," Hale said. "Buyers can continue to take advantage of low mortgage rates to make a move and more sellers, particularly in smaller, more affordable home price tiers are creating opportunity, especially for first-time buyers who tend to shop for smaller homes."
If you want to take advantage of low rates to buy a home or refinance your current mortgage to lower your monthly mortgage payments, contact Credible to speak to a home loan expert and get all of your questions answered.
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