Mortgage rates for August 18

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After weeks of dramatic moves, mortgage rates took a small step back this week.

The latest data released by Freddie Mac on Thursday showed the 30-year fixed-rate average fell 0.8 points to 5.13 percent. (A point is a fee paid to the lender equal to 1 percent of the loan amount. In addition to the interest rate) it was 5.22 percent a week ago and 2.86 percent a year ago.

Freddie Mac, a federally chartered mortgage broker, aggregates rates from more than 80 lenders across the country to come up with weekly national averages. The survey is based on home purchase loans. Rates for refinancing may vary. It benefits high-quality borrowers with strong credit scores and large down payments. Due to the criteria, these amounts are not available to every borrower.

The 15-year fixed rate average fell to 4.55 percent, an average of 0.7 points. It was 4.59 percent a week ago and 2.16 percent a year ago. The five-year adjusted rate fell an average of 0.3 points to 4.39 percent. It was 4.43 percent a week ago and 2.43 percent a year ago.

“Bond markets have found little impetus to move in either direction, after a few weeks of sharp up-and-down swings,” said Holden Lewis, home and mortgage expert at NerdWallet. “While mortgage rates have remained relatively stable, the number of people applying for mortgages has fallen to its lowest level since 2000. This year’s fast mortgage rates and home prices have discouraged buyers. On top of that, buyers believe that home prices will drop, so they are putting their home purchase plans in place now in hopes of buying at a lower price. That’s why mortgage applications are at a 22-year low.

The minutes of the Federal Reserve’s July meeting, released this week, showed no sign that the central bank is considering pulling back interest rates, although Fed officials said housing activity was “weak” and likely to continue to slow. The Fed has raised the federal funds rate four times this year in an effort to control inflation.

Before slowing rate hikes, federal officials first want to see inflation drop significantly. The most recent data for July showed inflation at 8.5 percent year-on-year, but flat month-on-month. Most economists expect the Fed to raise the benchmark rate by 50 or 75 basis points at its September meeting. (A basis point is 0.01 percentage point.)

Bright MLS Chief Economist Lisa Sturtevant said: “Mortgage rates will rise as the Federal Reserve’s steps to ease the economy into a ‘soft landing’ are likely to kick in.” “A better-than-expected July jobs report suggests an overheated economy may be cooling down without hurting the labor market. Recession fears may be receding, which has caused investors to leave the relatively safe bond market.”

The yield on the 10-year Treasury rose to its highest level since late July this week, closing at 2.89 percent on Wednesday. Products move in the opposite direction of price.

Rick Sharga, executive vice president of market intelligence at Atom Data Solutions, a real estate data and analytics firm, said looking at the gap between long-term bond yields and mortgage rates could indicate that rates are peaking.

“One of the signs that we are at or near a peak cycle for mortgage payments is the above-normal spread between the 10-year U.S. Treasury yield and the 30-year fixed-rate,” Sharga wrote. In the email. “Recent Treasury yields were between 2.8-2.9. [percent]This typically indicates rates on a 30-year mortgage between 4.25-5.0. [percent]. So today’s interest rate is close to 5.5 [percent] It is from .50 to 1.25 [basis] A higher score than we would normally expect to see. While there’s no guarantee that rates won’t go any higher, this relatively high spread suggests there’s room for mortgage rates to drop slightly in the near term.

Calculate how much more mortgages will cost you when interest rates rise.

More than half of experts at Bankrate.com, which publishes its weekly mortgage rate trend index, expect rates to rise in the coming week.

Sierra Pacific Mortgage Branch Manager Michael Baker said: “Inflation from the UK will sell bond markets.” “Inflation in the UK came in at 10.1%, ahead of forecasts of 9.8%. Core inflation came in higher than forecast. This serves as a reminder that central banks still have some work to do in bringing down inflation, which will lead to higher mortgage rates.”

Bloomberg News reported this week that Wells Fargo, once one of the nation’s largest home mortgage lenders, is pulling out of the mortgage market. According to the story, various factors contributed to the decision. Home loans are shrinking at the beginning of this year. Wells Fargo faces stiff competition from non-bank lenders. And by reducing home loan activities, Wells Fargo is less likely to face regulatory risk. The bank was hit with a $250 million fine by regulators last year in its lending business.

Meanwhile, mortgage demand hit a 22-year low last week. The market composite index — a measure of overall loan application volume — fell 2.3 percent from a week earlier, according to data from the Mortgage Bankers Association.

The improvement index fell 5 percent last week to its lowest level since November 2000. It was 82 percent lower than a year ago. The purchasing index was down 1 percent. The refinance share of mortgage activity accounted for 31.2 percent of applications.

“While overall mortgage application activity slowed slightly this week, mortgage rates have continued their downward trend and are now at their highest levels. [a half-percentage point] Starting in June, offering some relief to borrowers, MBA President and CEO Bob Brocksmith wrote in an email. “The MBA still expects both mortgage rates and home price growth to moderate, which will bring more prospective buyers into the market by the end of the year.”

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