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Freddie mac’s latest primary mortgage market survey (PMMS) found the 30-year fixed rate mortgage (FRM) to average 2.88%, averaging 0.7 points for the week ending September 23, 2021, up slightly from the week last, where it averaged 2.86%. A year ago, at this time, the 30-year FRM was on average 2.90%.

“The slowdown in economic growth around the world has caused a flight to the quality of US financial markets,” said Sam khater, Chief Economist of Freddie Mac. “This has led to an increase in purchases by foreign investors of US Treasuries, leading to the maintenance of mortgage rates, despite the increasing dispersion of inflation among different consumer goods and services.”

Earlier in the day, the The US Department of Labor reported that for the week ending September 18, the figure for seasonally adjusted initial jobless claims was 351,000, an increase of 16,000 from the revised level of the previous week. The previous week’s level has been revised up by 3,000 from 332,000 to 335,000.

“On the housing front, buyers continue to take hold of available inventory, which has improved slightly, and home price growth is moderating,” Khater said. “However, the next few months will be hectic as several home builders report they will be providing less supply due to labor and material shortages.”

Earlier this week, the National Association of Home Builders (NAHB), in its NAHB / Wells Fargo Housing Market Index (HMI), found that builders’ confidence strengthened in September thanks to falling lumber prices and strong demand for housing, even as the housing sector continues to grapple with supply chain issues. supply of construction materials and labor. Ending a three-month drop, builder sentiment in the market for newly built single-family homes edged up one point to 76 in September, according to the HMI.

“The sentiment among manufacturers has gradually cooled since the HMI hit a record high of 90 last November,” said NAHB President Chuck Fowke. “Data for September shows stability as some challenges related to the cost of building materials ease, particularly for softwood lumber. However, delivery times remain elongated and the chronic labor shortage in construction is expected to persist as the overall labor market recovers. “

And for the second month in a row, Fannie Mae’s economists have downgraded and out-revised expectations for near-term real GDP growth amid persistent supply chain disruptions and tight labor markets. , according to its September 2021 commentary by the Economic and Strategic Research (ESR) Grouper. These factors, they say, will affect the housing market as well as the economy as a whole.

“Economic growth continues to be held back by supply chain and labor market constraints, which we plan to continue until 2022,” said Doug Duncan, Fannie Mae SVP and Chief Economist. “We also expect inflation to remain elevated for much of next year, although the peak of the recent surge is behind us. Given the strength of the recent appreciation in house prices and rent growth, we continue to believe that housing’s contribution to core inflation has not yet been fully realized as part of official inflation measures. In addition, affordability remains a challenge , even with mortgage rates close to historic lows; if the pace of income growth does not keep pace with inflation and interest rates rise more than expected, we would expect real estate activity slows down from our current projections. “

Additionally, this week, Freddie Mac’s PMMS found the 15-year-old FRM to average 2.15%, averaging 0.6 points, up from last week when it averaged 2 , 12%. A year ago, at this time, the 15-year FRM was on average 2.40%. Meanwhile, the five-year Treasury-indexed Variable Rate Hybrid Mortgage (ARM) averaged 2.43%, averaging 0.3 points, down from last week where it was on average 2.51%. A year ago, at this time, the five-year MRA averaged 2.90%.

“For the real estate markets, 2021 has been a year of record prices, fueled in part by record mortgage rates,” said Realtor.com, head of economic research. George ratiu. “In the last quarter of the year, the Fed’s stated intention to cut asset purchases should start to push rates higher. The move is likely to be gradual, giving buyers time to take advantage of rates. still favorable amid a growing number of homes for sale New listings on Realtor.com have increased in 21 of the last 26 weeks compared to the same period in 2020. However, price growth continues on a trend on the rise, albeit at a slower pace. Affordability issues may play a larger role as mortgage rates rise in the coming months. At today’s rates, the monthly mortgage payment on a median house price is $ 97 higher than a year ago.

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