The Delta variant spurred a startling mortgage rate plummet as of late. Mortgage rates declined as a result of the increasing economic uncertainties. Analysts attribute the uncertainty to the COVID-19 Delta variant and its mutations. As a results, the average 30-year loan rate fell to a five-month record.
Freddie Mac Shows How Delta Variant Spurred Startling Mortgage Rate Plummet
Freddie Mac released the results of its Primary Mortgage Market Survey (concluding on August 5th). The results showed that the 30-year fixed-rate mortgage declined to 2.77%. This marks the fourth week in a row of falling mortgage rates, displaying how the Delta variant spurred the startling mortgage rate plummet.
On a slightly more optimistic note, mortgage rates rose marginally to 2.80% the week before. However, according to Sam Khater, chief economist at Freddie Mac, “Concerns about the Delta variant and the pandemic’s general trajectory are undoubtedly affecting economic growth.”
Sam Khater also stated that although the economy keeps improving; however, Treasury yields have declined, and mortgage rates have responded accordingly. He later explained that the low rates are not really helping many house buyers who cannot find the right property due to historically low inventory or simply cannot afford the exorbitant costs of those that are available.
However, Khater presumes that the falling rates present homeowners with another opportunity to have some money saved on their monthly mortgage payments by refinancing. On the other hand, investors’ investment apprehension presents great news for home buyers and those looking for a last-minute refinance.
Overall, pandemic-related heavily influences current investment decisions. Therefore, it’s highly improbable that subsequent data releases, such as the monthly jobs report, will significantly impact the mortgage rates.
Furthermore, analysts wait to see whether property buyers take advantage of these record-low rates. Having said that, the lack of available homes for sale continues to limit buyers’ options. Besides, despite declining rates, the Mortgage Banker Association’s most current report on mortgage applications revealed a dip in the number of applications for loans often used to buy homes.
Nevertheless, the central bank hasn’t signaled that it will alter its USD120 billion in monthly purchases of United States mortgage-backed securities and Treasury bonds. Once the economy makes significant progress in the employment market, this may change.
The previous year, particularly at this time, the 30-year fixed-rate mortgage stood at approximately 2.88% while the 15-year fixed-rate mortgage remained at 2.10%, unchanged from the previous week.
In conclusion, mortgage rates remained persistently low. In fact, mortgage rates, hardly topped 3% despite the forecast that higher rates would return in 2021. In addition, investors and economists are watching for any sign that the Federal Reserve may start to reduce its asset purchases.
To learn more about how the Delta variant spurred a startling mortgage rate plummet, get in touch with one of the title and escrow specialists at Plymouth Title Guaranty Corporation.
Please note: The safety of our staff and clients is our highest priority. Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:
All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office.
- If a party to the closing is not feeling well, please contact your closer before the closing so appropriate precautions can be taken.
- We ask visitors to utilize the restroom in our building upon arrival to thoroughly wash their hands before entering our office.
- Only individuals required to sign and/or deliver documents at closings will be allowed in our office. Specifically, closings will be limited to borrower(s), seller(s), agents, and lenders.
- All pens used in the closing will be given to the client after use.
- All closing rooms will be cleaned and disinfected in-between each closing.
- Those picking up checks at our office will be instructed to call our main line and request to speak to a staff member who will plan for delivery to the lobby or parking lot of our office.
- All staff will refrain from shaking hands before or after closings and ask clients to do the same.
Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.