Mortgage rates fell for the 2nd time in 4-weeks in the week ending 19th November. Reversing a 6 basis point rise from the week prior, the 30-year fixed-rate slid by 12 basis points.
Compared to this time last year, 30-year fixed rates were down by 94 basis points.
30-year fixed rates were down by 222 basis points since November 2018’s most recent peak of 4.94%.
Economic Data from the Week
Economic data was on the busier side in the 1st half of the week.
Key stats included New York Empire State Manufacturing numbers, retail sales, and industrial production figures.
The stats were skewed to the negative, with retail sales and manufacturing numbers disappointing.
Industrial production figures did come out ahead of forecasts but were not enough to support yields.
From the housing sector building permit and housing start numbers for October also had a muted impact on market risk sentiment.
A reintroduction of containment measures to curb the surge in the number of new COVID-19 cases also weighed. Progress towards a COVID-19 vaccine provided some cushioning in the week, however.
Freddie Mac Rates
The weekly average rates for new mortgages as of 19th November were quoted by Freddie Mac to be:
- 30-year fixed rates decreased by 12 basis points to 2.72% in the week. Rates were down from 3.66% from a year ago. The average fee remained steady at 0.7 points.
- 15-year fixed rates fell by 6 basis points to 2.28% in the week. Rates were down from 3.15% compared with a year ago. The average fee held steady at 0.6 points.
- 5-year fixed rates tumbled by 26 basis points to 2.85% in the week. Rates were down by 54 points from last year’s 3.39%. The average fee fell from 0.4 points to 0.3 points.
According to Freddie Mac,
- Weaker consumer spending drove mortgage rates to a record low in the week.
- While economic growth remains unstable, however, strong housing demand continues to have a domino effect on many other segments of the economy.
Mortgage Bankers’ Association Rates
For the week ending 13th November, rates were quoted to be:
- Average interest rates for 30-year fixed, backed by the FHA, remained increased from 3.08% to 3.11%. Points remained unchanged 0.37 (incl. origination fee) for 80% LTV loans.
- Average interest rates for 30-year fixed with conforming loan balances rose from 2.98% to 2.99%. Points increased from 0.35 to 0.37 (incl. origination fee) for 80% LTV loans.
- Average 30-year rates for jumbo loan balances decreased from 3.13% to 3.11%. Points decreased from 0.31 to 0.28 (incl. origination fee) for 80% LTV loans.
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, slipped by 0.3% in the week ending 13th November. In the week prior, the Index had fallen by 0.5%.
The Refinance Index decreased by 2% but was 98% higher than the same week a year ago. In the week prior, the index had risen by 1%.
The refinance share of mortgage activity fell from 70.0% to 69.8%. In the week prior, the share had risen from 68.7% to 70.0%.
According to the MBA,
- Mortgage activity was mixed last week, despite the 30-year fixed-rate mortgage remaining below 3%.
- The purchase market recovered from its recent weekly slump, with activity rising 3%. It was the 26th straight week, where purchase applications climbed above one-year ago levels.
- Housing demand remains supported by the ongoing labor market recovery and increased demand for more space stemming from the pandemic.
- While the refinance index fell last week, demand remained robust and was 98% above a year ago.
- The average refinance loan balance of $291,000 last week was the lowest since January, however. Borrowers with higher loan balances may have acted earlier on.
For the week ahead
It’s a particularly busy 1st half of a shortened week on the U.S economic calendar.
Key stats include prelim private sector PMIs, consumer confidence, durable goods, and weekly jobless claims figures.
Trade data, 2nd estimate GDP numbers, and inflation and consumer sentiment figures are also due out.
Away from the economic calendar, U.S politics, COVID-19 news updates, and Brexit will continue to influence.