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The average 30-year fixed-rate mortgage slipped back down to 2.77% for the week ending August 5, according to mortgage rates data released Thursday by Freddie Mac<\/strong>\u2018s PMMS.<\/p>\n The week prior, mortgage rates had rebounded slightly<\/a> to 2.80%. According to Sam Khater, chief economist at Freddie Mac, concerns over the COVID-19 Delta variant, along with lower 10-year Treasury yields, have resulted in lower rates.<\/p>\n \u201cWith global market uncertainty surrounding the Delta variant of COVID-19, we saw 10-year Treasury yields drift lower and consequently mortgage rates followed suit,\u201d said Khater. \u201cThe 30-year fixed-rate mortgage dipped back to where it stood at the beginning of 2021, and the 15-year fixed remained at its historic low. This bodes well for those still looking to refinance, renovate or even purchase a new home.\u201d<\/p>\n A year ago at this time, the 30-year fixed-rate mortgage averaged 2.88%. The 15-year fixed-rate mortgage stood unchanged from the week prior, at 2.10%.<\/p>\n Mortgage rates have stayed stubbornly low, barely exceeding 3%, defying predictions that 2021 would bring a return to higher levels. Economists and investors are waiting<\/a> for any indication that the Federal Reserve<\/strong> may begin tapering its asset purchases.<\/p>\n But the central bank has not indicated that it will change its $120 billion in monthly purchases of U.S. Treasury bonds and mortgage backed securities, at least until substantial further progress<\/a> is made in the labor market.<\/p>\n Price fluctuations in some goods, such as lumber<\/a>, have fueled concerns that inflation will be more widespread. Federal Reserve Chair Jerome Powell has called the price increases transitory, noting that they are limited to certain segments of the economy.<\/p>\n In a HousingWire Daily podcast<\/a>, Ajita Atreya, a senior economist at Freddie Mac<\/strong>, <\/strong>said she agreed with that assessment.<\/p>\n \u201cWe\u2019re in the camp that believes the inflationary pressure that we\u2019re seeing now is transitory, but definitely something that we should be watching out for, because that\u2019s going to have a major implication in the housing market, and especially if the Fed decides to correct it,\u201d said Atreya.<\/p>\n Despite the Fed\u2019s continued accommodative stance, the housing market is showing signs of cooling.<\/p>\n Mortgage applications tracked by the Mortgage Bankers Association fell 1.7% in the week ending July 30<\/a>, in spite of the 30-year fixed rate falling to its lowest level in roughly six months. <\/p>\n Just a week earlier, applications had increased 5.7%, buoyed by descending mortgage rates.<\/p>\n Mike Fratantoni, MBA\u2019s senior vice president and chief economist, said the decline in mortgage applications can be attributed to the market\u2019s assessment of the latest COVID-19 delta variant.<\/p>\n \u201cThirty-year mortgage rates dropped below 3% in our survey for the first time since February, presenting an opportunity for many homeowners who have not yet refinanced to lower their rate and payments,\u201d Fratantoni said. \u201cRefinance application volume slightly decreased following an 11% jump last week, and purchase application volume decreased again, reflecting the ongoing lack of inventory that continues to drive rapid home-price appreciation across the country.\u201d<\/p>\n But the low rates<\/a> made little difference in the purchase market, as home prices continue to rise. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier, the MBA reported.<\/p>\n Home prices increased across the board in May, leaping 16.6% annually in the latest S&P CoreLogic Case-Shiller<\/strong> National Home Price Index report<\/a>, marking the 12th consecutive month of accelerating prices.<\/p>\n \u201cA month ago, I described April\u2019s performance as \u2018truly extraordinary,\u2019 and this month I find myself running out of superlatives,\u201d said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI. \u201cWe have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. May\u2019s data continue to be consistent with this hypothesis.\u201d<\/p>\n The post Delta variant fears send 30-year mortgage rates to 2.77%<\/a> appeared first on HousingWire<\/a>.<\/p>\n