Freddie Mac Mortgage Rate December 2, 2021
What Happened to Mortgage Rates This Week:
The Freddie Mac fixed rate for a 30-year loan pressed upward this week, with a 1 basis point bump to 3.11%. Investors balanced worries about the new omicron COVID variant with cues from the ADP private sector employment numbers which outpaced market expectations. Markets also took note of Federal Reserve Chairman Powell’s testimony in Congress which pointed to a potential faster pullback in asset purchases—including mortgage-backed securities—as a sign of continued economic improvement. Markets will be focused on tomorrow’s payroll employment data for more information about the economic direction.
What Does this Mean:
Real estate markets continue to benefit from favorable dynamics as we approach the end of the year. Demand remains robust, keeping inventory moving swiftly and prices on an upswing, even as the highly competitive environment from early 2021 is firmly in the rearview mirror. The slight cooling in housing markets and mortgage rates, still low by historical standards, have many buyers determined to find a home even in the cooler months of the year. Realtor.com’s 2022 housing forecast expects the winter months to be busier than usual, with momentum carrying into the New Year. We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options. In addition, we see construction companies delivering more new homes next year, helping to alleviate the steep shortage of new supply. However, we also expect mortgage rates to rise, hitting 3.6% by the end of 2022, creating even more affordability challenges for first-time buyers. Buyers looking at today’s median-priced home are already paying $165 more on their monthly mortgage than they did a year ago.