E Economics

30-Year Mortgage Rate Fell To A 5-Month Low, Supporting Prices

17 July, 2021
Existing Home Sales

The 30-Year mortgage rate retraced for the third straight week, reaching a 5-month low. The move kept supporting housing prices, which already rose most in decades.

30-Year Mortgage Rate Fell For The Third Straight Week

According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 2.88 percent for the week ending July 15, 2021 (the lowest since mid-February). It was down from the previous week when it averaged 2.90 percent. A year ago at this time, the 30-year FRM averaged 2.98 percent.

Over the same period, Freddie Mac report also showed the 15-year fixed-rate mortgage rose slightly. It averaged 2.22 percent, up from 2.20 percent last week. A year ago at this time, the 15-year FRM averaged 2.48 percent.

Low Mortgage Rates Kept Boosting Housing Prices

Coupled with a shortage of homes for sale, low mortgage rates are supporting housing prices. The S&P CoreLogic Case-Shiller index of national property values — the main benchmark — climbed 14.59% YoY in April, the biggest gain in data going back to 1988. The trend is likely to strenghten in May according to Zillow, which expects a jump of 16.2% YoY. The acceleration would be coherent with recent data from Corelogic and Black Knight and could continue in June and July.