Mortgage rates slid to the lowest point since February, as concerns grow about the rise of the delta variant of the virus that causes COVID-19.
The 30-year fixed-rate mortgage averaged 2.77% for the week ending August 5, down three basis points from the previous week, Freddie Mac
reported Thursday. Since peaking at 3.18% back in April, the rate on the 30-year mortgage has now fallen more than 40 basis points.
The 15-year fixed-rate mortgage held steady at an average of 2.1%, an all-time low. Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell by five basis points to an average of 2.4%.
“Mortgage rates fell further this week, reaching their lowest level in six months as investors reevaluate their outlook for long-term economic growth,” said Zillow
senior economist Matthew Speakman. “For months, the market impact of pandemic-related factors has far outweighed the influence of traditional economic reports, and developments in recent weeks have reinforced that trend.”
Investors’ hesitancy to make big moves in light of rising COVID-19 cases involving the more infectious delta variant, however, is good news for home buyers and anyone looking to make a last-ditch refinance.
“This wait-and-see approach tends to lead investors to favor bonds, which means lower rates in the near term,” said Danielle Hale, chief economist at Realtor.com. (Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp
Given how strong of a role pandemic-related developments are playing right now in terms of investors’ actions, it is unlikely that upcoming data releases including the monthly jobs report will have an outsized impact on mortgage rates.
Whether home buyers will be able to take advantage of these historically low rates remains to be seen. The shortage of homes for sale persists, limiting buyers’ options. The most recent data for mortgage applications released Wednesday by the Mortgage Banker Association showed a decrease in the number of applications for loans used to purchase homes, despite falling rates.