US 30-year mortgage price falls for third week to common 2.88%
July 16, 2021, 4:02 pm
Updated on: 07/16/2021, 4:24 pm
Mortgage rates have been mixed this week. The 30-year benchmark loan fell for the third straight week on ongoing concerns about the recent spike in inflation.
Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year home loan fell from 2.90% last week to 2.88%, up from its high of 3.18% in April this year. The key interest rate was 2.98% a year ago.
The interest rate on a 15-year loan, a popular option among homeowners refinancing their mortgages, rose to 2.22% from 2.20% last week.
Freddie Mac economists predict that economic growth will gradually drive mortgage rates higher in the second half of the year.
Federal Reserve Chairman Jerome Powell spoke about inflation concerns, which have been mounting in recent months as the recovery from the pandemic recession has risen. In a testimony to a US House of Representatives committee on Wednesday, he suggested that inflation “is likely to stay high” in the months ahead before it becomes “moderate”. At the same time, Powell did not signal any imminent change in the Fed’s ultra-low interest rate policy.
As the latest sign of heightened inflationary pressures, the government announced on Tuesday that prices paid by US consumers rose by the sharpest increase in 13 years in June. It was the third month in a row that inflation skyrocketed.
Further evidence came on Thursday that the economy and labor market are recovering rapidly: The Labor Department reported that the number of Americans applying for unemployment benefits last week was at its lowest level since the pandemic broke out last year. The weekly balance sheet showed that unemployment claims fell by 26,000 to 360,000.