Mortgage

Mortgage rates fall due to rising omicron cases

Mortgage rates fall due to rising omicron cases
Written by Publishing Team

The recent surge in novel coronavirus cases has helped push mortgage rates to their lowest level in more than a month, according to Freddie Mac.

The average 30-year fixed-rate mortgage fell to 3.05% for the weekly period ending December 23, according to Freddie Mac’s preliminary mortgage market survey. The drop comes after the 30-year rate has hovered near the 3.1% mark since mid-November. Since a weekThe 30-year average is up seven basis points at 3.12%, while it is 2.66% over the same seven-day period in 2020.

“The market volatility caused by the COVID-19 omicron variable is causing mortgage rates to drop,” said Sam Khater, chief economist at Freddy Mac.

Seven-day weekly average of new cases rose sharply in the first half of the month, with the total number of cases in the United States now reaching more than 50 million, according to the Centers for Disease Control and Prevention. The increase in new cases coincides with the emergence of the omicron variant now dominant dynasty in the United States

Market concerns about the new variable mitigated any impact from Last week’s Fed announcements, news that usually puts upward pressure on interest rates. After the FOMC meeting, the central bank indicated that it will speed up curtailment of the asset purchase program “in light of inflation developments and further improvement in the labor market.” The Fed will restore the pace of asset purchases by $20 billion for Treasury securities and $10 billion for the agency’s mortgage-backed securities. In January, total monthly purchases of Treasuries will drop to $40 billion per month and $20 billion per month in MBS assets.

“The Committee considers that similar reductions in the pace of net asset purchases will likely be appropriate each month, but is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” the Fed said in a news release.

While the omicron variable threw uncertainty into the housing market and direction of price movements, strong demand Continue to fuel sales. “As the year comes to a close, the housing market is going steadily,” Khater said. “However, prices are expected to rise in 2022, which will affect homebuyer demand as well as refinancing activity.”

Alongside the decline in the 30-year average, the 15-year average is also down, dropping four basis points to 2.3% from 2.34% a week ago. From a year ago, the 15-year average was 2.19%.

Similarly, the Treasury’s 5-year adjustable rate mortgage fell eight basis points to 2.37% from 2.45% the week prior. Last year at the same time, the 5-year average ARM was 2.79%.

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