The average 30-year fixed-rate mortgage fell eight basis points from the week prior to 2.9%, according to data released Thursday by Freddie Mac‘s PMMS.
According to Sam Khater, Freddie Mac’s chief economist, last week’s dip followed the concurrent drop in U.S. Treasury yields earlier this week.
“While mortgage rates tend to follow Treasury yields closely, other factors can be impactful such as the labor markets, which are continuing to improve per last week’s jobs report,” said Khater. “We expect economic growth to gradually drive interest rates higher, but homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around three percent.”
Mortgage rates have been in a state of limbo for several months now. Economists and investors are closely watching for any indication that the Federal Reserve may change its position on the tapering of assets. Minutes released on Wednesday of the Fed’s June FOMC meeting revealed the conversation may be happening sooner rather than later.
Several Fed officials said they would like to reduce the pace of purchasing mortgage securities “more quickly or earlier” in light of skyrocketing home prices.
