E Economics

30-Year Mortgage Rate Hit A 6-Month Low, Further Supporting Prices

06 August, 2021
30-Year Mortgage Rate

Latest real estate indexes confirmed that US housing prices growth remained strong in June. The trend is unlikely to weaken sharpy in a context where the 30-year mortgage rate hit a 6-month low.

Housing Prices Rose Most In Decades

Latest data for June confirmed that housing prices growth remained robust in June. The CoreLogic House Price grew by 17.2% YoY, the highest annual growth since 1979. The report highlighted “In June, appreciation of detached properties (19.1%) was the highest measured since the inception of the index and nearly double that of attached properties (10.7%) as prospective buyers continue to seek more living space and lower density communities.

In the meantime, the Freddie Mac House Price index increased by 19.0% YoY in June (the largest increase since data are recorded back to 1975).

30-Year Mortgage Rate Declined To A 6-Month Low

Even though peak growth is probably behind us, the trend is unlikely to weaken sharply in a context where mortgage rates are close to record low. According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 2.77 percent for the week ending August 5, 2021 (the lowest since early February). It was down from the previous week when it averaged 2.80 percent. A year ago at this time, the 30-year FRM averaged 2.88 percent.

Over the same period, Freddie Mac report also showed the 15-year fixed-rate mortgage remained unchanged, after hitting a record low last week. A year ago at this time, the 15-year FRM averaged 2.44 percent.