Mortgage rates still flat at 2.86%

The average 30-year-fixed mortgage continued to hover around the 2.86% mark for the week ending Sept. 16, according to Freddie Mac‘s latest PMMS survey. Mortgage rates have been around that mark for roughly two months, leading economists at Freddie Mac to liken it to “Groundhog Day.”

“The holding pattern in rates reflects the markets’ view that the prospects for the economy have dimmed somewhat due to the rebound in new COVID cases,” said Sam Khater, Freddie Mac’s chief economist. “While our collective attention is on the pandemic, fundamental changes in the economy are occurring, such as increased migration, the extended continuation of remote work, increased use of automation, and the focus on a more energy efficient and resilient economy. These factors will likely lead to significant investment and new post-pandemic economic models that will spur economic growth.”

According to Freddie Mac, the 30-year-fixed-rate mortgage was down slightly from last week’s 2.88% (with an average of 0.7 points). It averaged about 2.87% a year ago. The 15-year-fixed-rate mortgage averaged 2.12% last week, a slight decline from the prior week’s 2.19%. A year ago, the average 15-year-fixed-rate mortgage was 2.35%.

Mortgage rates have struggled to reach 3% for much of 2021, despite widespread expectations they’d be in the mid-3s or higher by the third quarter. The Federal Reserve continues to make monthly asset purchases, driving the cost of lending down.

Although the central bank previously signaled that by November it would at least begin to taper its $120 billion in monthly purchases of U.S. Treasury bonds and mortgage backed securities, the rise in COVID Delta variant cases has cast made that scenario much less likely.


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Mortgage loan application volume rebounded from the week prior, increasing by 0.3% for the week ending Sept. 10, according to the Mortgage Bankers Association’s weekly report. The increase in application volume was largely driven by purchase mortgage activity, which grew by 8% from the week prior, the MBA said.  

Not surprisingly, the refi index has continued to slip, dipping 3% from the previous week, the MBA noted.

Joel Kan, associate vice president of economic and industry forecasting, said that purchase mortgage application volume is currently at its highest level since April 2021.

“Compared to the same week last September, which was right in the middle of a significant upswing in home purchases, applications were down 11%– the smallest year-over-year decline in 14 weeks,” Kan said.

He also noted that volume for both conventional and government purchase applications increased last week, as did the average loan size for a purchase application, rising to $396,800.

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