US Mortgage Rates Rise for a Sixth Consecutive Week to 6.7%

In the week ending September 29, mortgage rates increased for a sixth consecutive week to 6.70%. In the week prior 30-year fixed rates rose by 27 basis points to 6.29%.

Following the 41-basis point jump, rates are up 171 basis points from an August 3 low of 4.99%. Year-over-year, 30-year fixed rates were up by 369 basis points to reach a new 2022 peak.

Economic Data from the Week

It was a relatively quiet week on the economic calendar, with durable and core durable goods in focus, with consumer confidence.

The numbers were upbeat. A sharp pickup in consumer confidence gave the Fed another green light to tackle inflation. The CB Consumer Confidence Index jumped from 103.6 to 108.0.

FOMC member chatter also contributed to the upswing in mortgage rates, with members aligned on cranking up interest rates to bring inflation to target.

Freddie Mac Rates

The weekly average rates for new mortgages, as of September 29, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 41 basis points to 6.70%. This time last year, rates stood at 3.01%. The average fee held steady at 0.9 points.
  • 15-year fixed rates surged by 52 basis points to 5.96%. Rates were up by 368 basis points from 2.28% a year ago. The average fee increased from 1.0 to 1.3 points.
  • 5-year fixed rates rose by 33 basis points to 5.30%. Rates were up by 282 basis points from 2.48% a year ago. The average fee remained unchanged at 0.4 points.

According to Freddie Mac,

  • Mortgage rates have doubled over the last year, driven by uncertainty and volatility in the financial markets.
  • The impact on a typical mortgage borrower paying at the higher range would be several hundred dollars more than a borrower locked in at the lower range.
  • Freddie Mac pointed out that “the dispersion in rates means it has become even more important for homebuyers to shop around with different lenders.”

Mortgage Bankers’ Association Rates

For the week ending September 23, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 6.25% to 6.52%. Points jumped from 0.71 to 1.15 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.85% to 6.17%. Points increased from 1.15 to 1.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.79% to 6.01%. Points rose from 0.46 to 0.70 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 3.7% in the week ending September 23. The Index increased by 3.8% in the week prior.

The Refinance Index slid by 11% and was 84% lower than the same week one year ago. In the previous week, the Index jumped by 10.%. The refinance share of mortgage activity decreased from 32.5% to 30.2%. In the week prior, the refinance share rose from 30.2% to 32.5% of total applications.

According to the MBA,

  • Applications for both purchase and refinances fell due to another surge in mortgage rates to multi-year highs.
  • More aggressive Federal Reserve policy measures to bring down inflation continue to push mortgage rates higher.
  • 30-year fixed rates are at their highest level since 2008 and, with rates more than double the rates from a year ago, refinancing activity is at a 22-year low.

For the week ahead

It is a busy week ahead with manufacturing and non-manufacturing PMI numbers due on Monday and Wednesday. While the ISM Non-Manufacturing PMI will have the most influence, JOLTs job openings and ADP nonfarm employment change numbers on Tuesday and Wednesday will also draw attention.

The Fed has a lot of wriggle room before labor market conditions force the Fed to take its foot off the gas.

Following Friday’s Core PCE Price Index numbers for August, FOMC member chatter will also influence.

US Mortgage Rates Rise to 6.29% in Response to the Fed

In the week ending September 22, mortgage rates continued to surge higher after breaking through the 6% mark for the first time since 2008. 30-year fixed rates increased by 27 basis points to 6.29%. In the week prior, rates rose by 13 basis points to 6.02%.

Following the 27-basis point rise, rates are up 130 basis points from an August 3 low of 4.99%. Year-on-year, 30-year fixed rates were up by 341 basis points to reach a new 2022 peak.

Economic Data from the Week

It was a quiet week on the economic calendar, with housing sector numbers in focus. While the stats had a muted impact on US Treasury yields, the FOMC monetary policy decision and FOMC projections drove yields higher.

A hawkish 75-basis point interest rate hike sent mortgage rates higher for a fifth consecutive week. The rise came despite the FOMC downwardly revising growth projections for this year and 2023.

Freddie Mac Rates

The weekly average rates for new mortgages, as of September 22, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 27 basis points to 6.29%. This time last year, rates stood at 2.88%. The average fee rose from 0.8 to 0.9 points.
  • 15-year fixed rates jumped by 23 basis points to 5.44%. Rates were up by 329 basis points from 2.15% a year ago. The average fee increased from 0.9 to 1.0 points.
  • 5-year fixed rates rose by four basis points to 4.97%. Rates were up by 254 basis points from 2.43% a year ago. The average fee increased from 0.2 to 0.4 points.

According to Freddie Mac,

  • Mortgage rates rose higher in response to 10-year Treasury yields surging to their highest level since 2011.
  • The housing sector continues to face headwinds because of the rise in mortgage rates.
  • House price growth is easing, with home sales falling.
  • However, the number of homes for sale remains below normal levels.

Mortgage Bankers’ Association Rates

For the week ending September 16, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 6.01% to 6.25%. Points fell from 0.76 to 0.71 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.71% to 5.85%. Points increased from 1.12 to 1.15 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.56% to 5.79%. Points rose from 0.39 to 0.46 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 3.8% in the week ending September 16. The Index decreased by 1.2% in the week prior.

The Refinance Index jumped by 10% from the previous week and was down 83% from the same week one year ago. In the previous week, the Index fell by 4%.

The refinance share of mortgage activity rose from 30.2% to 32.5%. In the week prior, the refinance share declined from 30.7% to 30.2% of total applications.

According to the MBA,

  • Treasury yields continued to climb in anticipation of the Fed’s September policy meeting and another hawkish rate hike.
  • While mortgage rates rose to their highest level since 2008, applications increased for the first time in six weeks.

For the week ahead

It is a busier week on the economic data front, with consumer confidence, core durable goods, and durable goods orders due on Tuesday. While core durable goods orders will draw interest, consumer confidence will likely impact yields the most.

Fed Chair Powell and FOMC members will also draw plenty of interest. On Wednesday, Fed Chair Powell will speak at the 2022 Community Banking Research Conference.

US Mortgage Rates Breach 6% on US CPI Report for August

In the week ending September 15, mortgage rates broke through the 6% mark for the first time since 2008. 30-year fixed rates increased by 13 basis points to 6.02%. In the week prior, rates jumped by 23 basis points to 5.89%. Following the 13-basis point rise, rates are up 103 basis points from an August 3 low of 4.99%.

Year-on-year, 30-year fixed rates were up by 316 basis points to reach a new 2022 peak.

Economic Data from the Week

On Tuesday, the US CPI report for August was the key driver behind the uptick in mortgage rates. Better-than-expected CPI numbers drove US Treasury yields and mortgage rates higher.

Market bets of a percentage point rate hike surfaced in response to the report, driving mortgage rates beyond six percent.

Freddie Mac Rates

The weekly average rates for new mortgages, as of September 15, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 13 basis points to 6.02%. This time last year, rates stood at 2.86%. The average fee stood at 0.8 points.
  • 15-year fixed rates rose by five basis points to 5.21%. Rates were up by 309 basis points from 2.12% a year ago. The average fee stood at 0.9 points.
  • 5-year fixed rates jumped by 29 basis points to 4.93%. Rates were up by 242 basis points from 2.51% a year ago. The average fee stood at 0.2 points.

According to Freddie Mac,

  • Better-than-expected US inflation figures pushed mortgage rates to the highest level since 2008.
  • While rates will continue to weigh on demand and house prices, inventories remain low.
  • Low inventory levels should cushion the housing sector from a sizeable price correction.

Mortgage Bankers’ Association Rates

For the week ending September 9, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.94% to 6.01%. Points fell from 0.79 to 0.76 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.61% to 5.71%. Points increased from 1.06 to 1.12 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.46% to 5.56%. Points declined from 0.40 to 0.39 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 1.2%. The Refinance Index fell by 4% and was 83% lower than the same week one year ago.

The refinance share of mortgage activity declined from 30.7% to 30.2% of total applications.

According to the MBA,

  • The 30-year fixed mortgage rate hit the six percent mark for the first time since 2008.
  • Higher mortgage rates have weighed heavily on refinancing activity, with homebuyers staying on the sidelines.
  • A widening spread between the conforming 30-year fixed mortgage rate and the ARM and Jumbo loans reflects the uncertainty about the Fed’s future policy moves.

For the week ahead

It is a quiet week on the economic data front, with US economic indicators limited to housing sector stats. While the numbers will draw interest, they are unlikely to influence US Treasury yields.

However, the Fed monetary policy decision on Wednesday and the FOMC economic forecasts will have a material impact on mortgage rates. A hawkish Fed rate hike would support another upswing in mortgage rates.

US Mortgage Rates Head Towards 6% on Fed Policy Mantra

In the week ending September 1, mortgage rates were on the rise for a second consecutive week. 30-year fixed rates increased by 11 basis points to 5.66%. In the week prior, rates surged by 42 basis points. Following the 11-basis point rise, rates are up 67 basis points from an August 3 low of 4.99%.

Year-on-year, 30-year fixed rates were up by 279 basis points while down 15 basis points since a June 22, 2022, peak of 5.81%.

Economic Data from the Week

Fed Chair Powell’s speech from Jackson Hole in the week prior drove mortgage rates higher in the week. Following Powell’s hawkish speech, FOMC members towed the Fed line, talking of the need to push rates beyond 4% to bring inflation under control.

On the economic data front, stats included JOLTs job openings, consumer confidence, and ADP employment change figures.

The stats were skewed to the positive, supporting the Fed’s monetary policy goals and the upward trend in mortgage rates.

Freddie Mac Rates

The weekly average rates for new mortgages, as of September 1, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 11 basis points to 5.66%. This time last year, rates stood at 2.87%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates rose by 13 basis points to 4.98%. Rates were up by 280 basis points from 2.18% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates jumped by 15 basis points to 4.51%. Rates were up by 208 basis points from 2.43% a year ago. The average fee held steady at 0.4 points.

According to Freddie Mac,

  • Mortgage rates are on the rise, driven by market sentiment towards the Fed’s monetary policy goals to curb inflation.
  • The upswing in mortgage rates comes at a precarious time for the housing sector, with lower purchase demand causing a slowdown in the rate of house price appreciation.

Mortgage Bankers’ Association Rates

For the week ending August 26, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.65% to 5.80%. Points rose from 0.68 to 0.71 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.43% to 5.57%. Points decreased from 1.10 to 1.09 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.28% to 5.32%. Points declined from 0.58 to 0.48 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 3.7%. The Index declined by 1.2% in the week prior.

The Refinance Index slid by 8% and was 83% lower than the same week one year ago. In the previous week, the Index fell by 3%.

The refinance share of mortgage activity declined from 31.1% to 30.3%. In the week prior, the share fell from 31.2% to 31.1%.

According to the MBA,

  • The 30-year fixed mortgage rate increased for a second consecutive week to reach its highest level since mid-July.
  • Mortgage and Treasury yields rose last week in response to Fed talk of rates staying higher for longer.
  • Application volume declined and remained at a multi-decade low, weighed by an 8% slide in refinance applications.
  • Rising inventories and slower home-price growth could draw some buyers back to the market later in the year.

For the week ahead

It is a quiet start to the week, with the US markets closed for Labor Day on Monday. However, ISM Non-Manufacturing PMI figures for August will influence US Treasury yields and mortgage rates on Tuesday. Following the market sensitivity to the ISM Manufacturing PMI and sub-components, the Non-Manufacturing PMI and sub-components will have more influence.

From elsewhere, trade data from China will also provide direction.

However, FOMC member chatter will likely be the key driver in the week. Following Yellen’s comments on the Fed’s obligation to curb inflation, hawkish FOMC member chatter would push mortgage rates back towards the June peak of 5.81% and beyond.

US Mortgage Rates Jump 42 Basis Points to 5.55% as Activity Wanes

In the week ending August 25, mortgage rates were back on the rise in what is proving to be a choppy August for prospective home buyers.

30-year fixed rates surged by 42 basis points to 5.55%. Reversing a 9-basis point fall from the previous week, fixed rates are up 56 basis points from an August 3 low of 4.99%.

Year-on-year, 30-year fixed rates are up by 268 basis points while down 26 basis points since a June 22, 2022, peak of 5.81%.

Economic Data from the Week

A relatively busy economic calendar delivered mixed results on the US economic data front. However, the key stat of the week was the prelim services PMI, which pointed to a US economic recession.

In August, the services PMI fell from 47.3 to 44.1, dragging the private sector into a deeper contraction. The composite PMI declined from 47.7 to 45.0.

Despite the weak numbers, market uncertainty ahead of the Jackson Hole Symposium delivered a choppy week for the markets.

From the housing market, US economic indicators also disappointed. In July, new home sales slid by 12.6% following a 7.1% fall in June. Pending home sales fell by a further 1.0% after having declined by 8.9% in June.

Freddie Mac Rates

The weekly average rates for new mortgages, as of August 25, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 42 basis points to 5.55%. This time last year, rates stood at 2.87%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates surged by 30 basis points to 4.85%. Rates were up by 268 basis points from 2.19% a year ago. The average fee increased from 0.7 points to 0.8 points.
  • 5-year fixed rates slipped by three basis points to 4.36%. Rates were up by 194 basis points from 2.42% a year ago. The average fee rose from 0.3 points to 0.4 points.

According to Freddie Mac,

  • Higher mortgage rates and economic woes are weighing on the housing sector, as home sales continue to fall.
  • House prices are moderating, while consumer confidence is low.
  • While demand wanes, potential buyers remain on the sidelines waiting to jump back into the market.

Mortgage Bankers’ Association Rates

For the week ending August 19, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.45% to 5.65%. Points rose from 0.57 to 0.68 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.38% to 5.43%. Points increased from 1.01 to 1.10 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.14% to 5.28%. Points rose from 0.33 to 0.58 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, declined by 1.2%. The Index decreased by 2.3% in the week prior.

The Refinance Index fell by 3% and was 83% lower than the same week one year ago. In the previous week, the Index declined by 5%.

The refinance share of mortgage activity declined from 31.2% to 31.1%. In the week prior, the share decreased from 32.0% to 31.2%.

According to the MBA,

  • Mortgage applications remained at a 22-year low, weighed by a sharp decline in refinancing demand and weak home purchase activity.
  • Average purchase loan sizes also continued to head lower as activity at the higher end of the market slowed.

For the week ahead

It is a busy start to the week. Economic data includes consumer confidence and JOLTs job openings on Tuesday and APD nonfarm employment change figures on Wednesday. Mortgage rates will also likely react to Fed Chair Powell’s speech from Friday, which could nudge rates towards 6%.

Following Fed Chair Powell’s speech, FOMC member chatter will also influence the direction of mortgage rates.

US Mortgage Rates Ease Back but Avoid sub-5% ahead of a Big Week

In the week ending August 18, mortgage rates slipped back after a choppy two weeks that saw 30-year fixed rates slide to sub-5% before jumping to 5.22%.

30-year fixed rates fell by 9-basis points, partially reversing a 23-basis point jump, to end the week at 5.13%. Prior to the 23-basis point jump, mortgage rates fell to sub-5% for the first time since April 6.

Year-on-year, 30-year fixed rates were up by 227 basis points while down 68 basis points since a June 22, 2022, peak of 5.81%.

Economic Data from the Week

Weak economic data from China set the tone on Monday. Industrial production increased by 3.8% year-over-year, down from 3.9% in June. Retail sales increased by 2.7% year-over-year, down from 3.1% in June. Economists forecast industrial production of 4.6% and retail sales of 5.0%.

The numbers disappointed, forcing the PBoC to deliver support that briefly limited the damage.

US economic indicators delivered mixed results. NY Empire State Manufacturing numbers also weighed on riskier assets ahead of positive stats on Tuesday and Wednesday.

US industrial production increased by 0.6%, with core retail sales up 0.4% in July to slow the flight to safety.

Freddie Mac Rates

The weekly average rates for new mortgages, as of August 18, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by nine basis points to 5.13%. This time last year, rates stood at 2.86%. The average fee rose from 0.7 to 0.8 points.
  • 15-year fixed rates slipped by four basis points to 4.55%. Rates were up by 239 basis points from 2.16% a year ago. The average fee held steady at 0.7 points.
  • 5-year fixed rates declined by four basis points to 4.39%. Rates were up by 196 basis points from 2.43% a year ago. The average fee rose from 0.0 points to 0.3 points.

According to Freddie Mac,

  • Mortgage rate surges have eased, with inflation seemingly beyond its peak.
  • The housing market continues to absorb the effects of price and rate increases that have weighed on affordability.
  • Looking ahead, demand will likely remain a drag, with home price growth on a downward trend due to a modest increase in supply.

Mortgage Bankers’ Association Rates

For the week ending August 12, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.47% to 5.45%. Points fell from 0.80 to 0.57 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.35% to 5.38%. Points decreased from 1.02 to 1.01 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.09% to 5.14%. Points fell from 0.59 to 0.33 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 2.3%. The Index rose by 0.2% in the week prior.

The Refinance Index declined by 5% and was 82% lower than the same week one year ago. In the previous week, the Index rose by 4%.

The refinance share of mortgage activity decreased from 32.0% to 31.2%. In the week prior, the share increased from 30.8% to 32.0%.

According to the MBA,

  • Application activity weakened, with overall applications falling to their lowest level since 2000.
  • Rising mortgage rates, a glum economic outlook, and affordability continued to weigh on mortgage applications.
  • The MBA sees slower home price growth and a downward trend in mortgage rates a boon for purchase activity.
  • Things were no better for refinance mortgages, with refinance activity falling to its lowest level since November 2000.

For the week ahead

It is a busier week ahead, with prelim August private sector PMIs and durable and core durable goods orders in focus. New and pending home sales will also draw interest in the first half of the week.

Weak service sector PMI and core durable goods orders could reignite fears of a US economic recession. We can also expect some market caution ahead of the Jackson Hole Symposium.

From elsewhere, the PBoC is due to set loan prime rates on Monday. A supportive move would be positive for riskier assets.

US Mortgage Rates Bounce Back on Strong US Nonfarm Payrolls

In the week ending August 11, mortgage rates jumped in a marked shift in sentiment towards the US economy, supported by impressive nonfarm payroll numbers for July.

30-year fixed rates jumped by 23 basis points, partially reversing the 31-basis point slump from the previous week. Mortgage rates had fallen to below 5% for the first time since April 6.

Year-on-year, 30-year fixed rates were up by 225 basis points while down 59 basis points since the June 22, 2022, peak of 5.81%.

Economic Data from the Week

Nonfarm payroll figures for July set the tone and drove mortgage rates back through 5%. Softer US inflation figures failed to soften the blow for prospective buyers, with the US annual rate of inflation sitting well above the Fed target.

The positive labor market numbers supported another sizeable Fed rate hike in September, with other economic indicators pointing to improving economic conditions.

Freddie Mac Rates

The weekly average rates for new mortgages, as of August 11, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 23 basis points to 5.22%. This time last year, rates stood at 2.85%. The average fee fell from 0.8 to 0.7 points.
  • 15-year fixed rates surged by 33 basis points to 4.59%. Rates were up by 244 basis points from 2.15% a year ago. The average fee increased from 0.6 points to 0.7 points.
  • 5-year fixed rates rose by 18 basis points to 4.43%. Rates were up by 199 basis points from 2.44% a year ago. The average fee fell from 0.3 points to 0.0 points.

According to Freddie Mac,

  • Mortgage jumped back through the 5.00% mark, demonstrating persistent volatility.
  • Recent data suggests that the housing market is stabilizing following the surge of activity during the COVID-19 pandemic.
  • Falls in purchase demand continue to slow while supply constraints linger.
  • House prices will likely continue to rise, albeit at a slower pace.

Mortgage Bankers’ Association Rates

For the week ending August 5, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.43% to 5.47%. Points rose from 0.65 to 0.80 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 5.39% to 5.35%. Points decreased from 1.03 to 1.02 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.06% to 5.09%. Points rose from 0.36 to 0.59 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, rose by 0.2%. The Index increased by 1.2% in the week prior.

The Refinance Index rose by 4% and was 82% lower than the same week one year ago. In the previous week, the Index climbed by 2%.

The refinance share of mortgage activity increased from 30.8% to 32.0%. In the week prior, the share increased from 30.7% to 30.8%.

According to the MBA,

  • Mortgage rates remained volatile.
  • While mortgage applications were flat, refinance applications increased as the purchasing market continues to face a slowdown.
  • Activity has declined in five of the last six weeks, with buyers on the sidelines due to affordability conditions and concerns over the economy.

For the week ahead

It is a big week ahead on the US economic calendar. US retail sales will be the key stat of the week. However, on Wednesday, the FOMC meeting minutes will also influence.

The impressive nonfarm payroll numbers and the softer inflation figures have created uncertainty over the September policy decision. The Fed may take the opportunity to deliver another 75-basis point hike that would force mortgage rates northwards while impacting affordability.

Other stats in the week include economic indicators from China that will also influence risk sentiment and US Treasuries indirectly.

US Mortgage Rates Tumble to Below 5% in Response to Recession Fears

In the week ending August 4, mortgage rates tumbled as concerns over inflation and the US economic outlook weighed.

30-year fixed rates slumped by 31 basis points. Following a 24-basis point slide from the previous week, mortgage rates fell to sub-5% for the first time since April 6.

Year-on-year, 30-year fixed rates were up by 222 basis points while down 82 basis points from June 22, 2022, peak of 5.81%.

Economic Data from the Week

Economic data from the week ending July 29 sounded the alarm bells. The US economy contracted by 0.9% following a 1.6% contraction in Q1, supporting market fears of a recession. Jobless claims were also on an upward trend, drawing interest ahead of the July nonfarm payroll numbers.

This week, stats in focus ahead of the mortgage rate release included July private sector PMI numbers.

The ISM Manufacturing PMI slipped from 53.0 to 52.8, while the ISM Non-Manufacturing PMI unexpectedly rose from 55.3 to 56.7.

However, labor market numbers disappointed, with JOLTs job openings falling from 11.303 million to 10.698 million. The numbers were significant as they preceded nonfarm payroll figures released after the mortgage rate publications.

Freddie Mac Rates

The weekly average rates for new mortgages, as of August 04, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates slumped by 31 basis points to 4.99%. This time last year, rates stood at 2.77%. The average fee held steady at 0.8 points.
  • 15-year fixed rates tumbled by 32 basis points to 4.26%. Rates were up by 216 basis points from 2.10% a year ago. The average fee declined from 0.8 points to 0.6 points.
  • 5-year fixed rates slipped by four basis points to 4.25%. Rates were up by 185 basis points from 2.40% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage volatility persisted due to inflationary pressures and clear evidence of weaker economic growth.
  • Uncertainty over inflation and other key drivers are likely to contribute to mortgage rate volatility as the Fed attempts to tackle the inflation issue amidst the weaker economic environment.

Mortgage Bankers’ Association Rates

For the week ending July 29, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.74% to 5.43%. Points rose from 0.61 to 0.65 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 5.54% to 5.39%. Points increased from 0.85 to 1.03 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances declined from 5.32% to 5.06%. Points fell from 0.43 to 0.36 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 1.2%. The Index declined by 1.8% in the week prior.

The Refinance Index rose by 2% and was 82% lower than the same week a year ago. In the previous week, the Index declined by 4%.

The refinance share of mortgage activity increased from 30.7% to 30.8%. In the week prior, the share decreased from 31.4% to 30.7%.

According to the MBA,

  • Mortgage rates declined in response to the Fed policy decision and the talk of more tightening.
  • Treasury yields fell due to expectations of a weaker economic environment.
  • The 30-year fixed saw the biggest weekly fall since 2020, with lower rates supporting refinance activity and purchase applications.
  • Lower mortgage rates and a rise in inventory could support a rebound in purchase activity.

For the week ahead

Inflation will be the area of focus, with July consumer price inflation numbers due on Wednesday.

Following the impressive nonfarm payroll numbers from Friday, another spike in inflation could see increased bets of a full percentage point rate hike in September. Such an eventuality could see mortgage rates bounce back.

US Mortgage Rates Rise for a Second Consecutive Week

In the week ending July 21, mortgage rates increased for a second consecutive week.

30-year fixed rates rose by three basis points. Following a 21-basis point surge from the previous week, mortgage rates returned to 5.54%.

Year-on-year, 30-year fixed rates were up by 276 basis points and by 60 basis points since the November 2018 peak of 4.94%.

Economic Data from the Week

There were no US economic indicators to provide US Treasuries with direction, leaving market sentiment towards Fed monetary policy in focus.

Housing sector data from the US continued to show weakness at the end of the second quarter.

Building permits fell by 0.6%, following a 7.0% slump in May. Housing starts fell by 2.0%, following an 11.9% tumble in May.

Existing home sales reflected the impact of higher mortgage rates on demand. In June, existing home sales followed a 3.4% fall from May with a 5.4% decline.

With the Fed in the blackout period from July 16 to July 28, there was no FOMC member chatter to influence.

Freddie Mac Rates

The weekly average rates for new mortgages, as of July 21, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by three basis points to 5.54%. This time last year, rates stood at 2.78%. The average fee held steady at 0.8 points.
  • 15-year fixed rates increased by eight basis points to 4.75%. Rates were up by 263 basis points from 2.12% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates declined by four basis points to 4.31%. Rates were up by 182 basis points from 2.49% a year ago. The average fee increased from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Housing activity remained weak, weighed by a further uptick in mortgage rates.
  • Consumer concerns over rising rates, inflation, and the risk of a recession pegged back demand.
  • Due to the current headwinds, house price appreciation is likely to slow noticeably.

Mortgage Bankers’ Association Rates

For the week ending July 15, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.74% to 5.82%. Points rose from 0.59 to 0.65 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 5.49% to 5.50%. Points decreased from 1.08 to 1.02 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.25% to 5.31%. Points remained unchanged at 0.38 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, fell by 6.3% in the week ending July 15. The Index declined by 1.7% in the week prior.

The Refinance Index decreased by 4% from the previous week and was 80% lower than the same week one year ago. In the week prior, the Index increased by 2%.

The refinance share of mortgage activity rose from 30.8% to 31.4%. In the previous week, the refinance share increased from 29.6% to 30.8%.

According to the MBA,

  • Mortgage applications fell for a third consecutive week to their lowest level since 2000.
  • Higher mortgage rates weighed on applications, with rates more than two percentage points higher than July 2021.
  • Refinances were also taking a hit, with the Refinance Index sliding to a 22-year low.
  • Higher inflation, the weakening economic outlook, and affordability weighed on demand.

For the week ahead

It is a big week ahead for the global financial markets, and US mortgage rates will also be in the spotlight.

On Tuesday, US consumer confidence figures will draw interest. Weak numbers will likely test support for riskier assets. Core durable goods will also influence mid-week.

However, the Fed monetary policy decision is the event of the week. On Wednesday, the markets expect a sizeable rate hike, the only question being whether it is a 75-basis point or 100-basis point rate hike.

Disappointing private sector PMI numbers from Friday could even raise the chances of a smaller 50-basis point hike, highlighting the degree of uncertainty.

US Mortgage Rates Jump on US Inflation Numbers

In the week ending July 15, mortgage rates bounced back from a two-week slump.

30-year fixed rates jumped by 21 basis points, partially reversing a 40-basis point tumble from the previous week to end the week at 5.51%.

Year-on-year, 30-year fixed rates were up by 263 basis points and by 57 basis points since the November 2018 peak of 4.94%.

Economic Data from the Week

US inflation figures contributed to the upswing in mortgage rates. In June, the US annual rate of inflation accelerated from 8.6% to 9.1%. Economists had forecast a rate of 8.8%.

The pickup in inflationary pressures, together with the nonfarm payroll figures, led to the talk of a 100-basis point rate hike later in the month.

However, fears of an economic recession limited the rise in mortgage rates that failed to reverse losses from the week prior.

Freddie Mac Rates

The weekly average rates for new mortgages, as of July 15, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 21 basis points to 5.51%. This time last year, rates stood at 2.88%. The average fee held steady at 0.8 points.
  • 15-year fixed rates surged by 22 basis points to 4.67% in the week. Rates were up by 245 basis points from 2.22% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates increased by 16 basis points to 4.35%. Rates were up by 188 basis points from 2.47% a year ago. The average fee decreased from 0.4 points to 0.2 points.

According to Freddie Mac,

  • Mortgage volatility persisted as economic growth slowed due to fiscal and monetary policy.
  • With rates at their highest in over a decade, house prices at elevated levels, and inflation hitting consumers, affordability remained the main issue for homebuyers.

Mortgage Bankers’ Association Rates

For the week ending July 8, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 5.74%. Points fell from 0.65 to 0.59 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 5.60% to 5.49%. Points increased from 0.89 to 1.08 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 5.28% to 5.25%. Points decreased from 0.44 to 0.38 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, fell by 1.7% in the week ending July 8. The Index decreased by 5.4% in the week prior.

The Refinance Index increased by 2% and was 80% lower than the same week one year ago. In the previous week, the Index slid by 8%.

The refinance share of mortgage activity increased from 29.6% to 30.8%. In the previous week, the refinance share declined from 30.3% to 29.6%.

According to the MBA,

  • While mortgage rates were relatively steady, applications fell for a second week in a row.
  • High mortgage rates and the weaker economic outlook weighed on applications.
  • Average purchase loan sizes were in decline, weighed by the prospect of slower home price growth and weaker purchase activity at the upper end of the market.

For the week ahead

It is a quiet week ahead on the US economic calendar. Housing sector numbers are due out in the first half of the week. Weak housing sector data could weigh on mortgage rates, with little else for the markets to consider.

On the monetary policy front, the Fed entered the blackout period on Saturday to sideline monetary policy chatter until the July policy decision.

US Mortgage Rates Hit Reverse Ahead of US Inflation Figures

In the week ending July 1, mortgage rates fell for a second consecutive week.

30-year fixed rates tumbled by 40 basis points, following an 11-basis point decline from the previous week to end the week at 5.3%.

Year-on-year, 30-year fixed rates were up by 240 basis points and up by 36 basis points since November 2018’s previous peak of 4.94%.

Economic Data from the Week

In a shortened week, private sector activity and JOLTs job openings were in focus ahead of June nonfarm payroll numbers on Friday.

The stats eased immediate market concerns of a recession, with labor market conditions and private sector activity showing no signs of weakening.

In June, the all-important ISM Non-Manufacturing PMI slipped from 55.9 to 55.3 versus a forecasted 54.3.

While the ISM number was positive, less hawkish-than-expected FOMC meeting minutes on Wednesday pegged back yields.

The FOMC meeting minutes highlighted the risk of rate hikes having a ‘larger-than-expected effect on economic growth.’ Prior to the minutes, the markets had priced in a 75-basis point rate hike for July. However, the minutes revealed that participants judged a 50 or 75 basis point increase as appropriate.

Freddie Mac Rates

The weekly average rates for new mortgages, as of July 7, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates slumped by 40 basis points to 5.30%. This time last year, rates stood at 2.90%. The average fee fell from 0.9 points to 0.8 points.
  • 15-year fixed rates slid by 38 basis points to 4.45% in the week. Rates were up by 225 basis points from 2.20% a year ago. The average fee fell from 0.9 points to 0.8 points.
  • 5-year fixed rates tumbled by 31 basis points to 4.19%. Rates were up by 167 basis points from 2.52% a year ago. The average fee increased from 0.3 points to 0.4 points.

According to Freddie Mac,

  • 30-year fixed mortgage rates fell by half a percent in the last two weeks, weighed by fears of a recession.
  • The pullback delivers minor homebuyer relief.
  • A continued slowdown in house price growth, however, stemming from low affordability and an expected economic slowdown, would continue to support a normalization in the housing market.

Mortgage Bankers’ Association Rates

For the week ending July 1, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.84% to 5.74%. Points rose from 0.64 to 0.65 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 5.62% to 5.60%. Points declined from 1.15 to 0.89 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 5.42% to 5.28%. Points increased from 0.28 to 0.44 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 5.4% in the week ending July 1. The index increased by 0.7% in the week prior.

The Refinance Index slid by 8% and was 78% lower than the same week one year ago. In the previous week, the Index increased by 2%.

The refinance share of mortgage activity declined from 30.3% to 29.6%. In the previous week, the share increased from 29.7% to 30.3%.

According to the MBA,

  • Mortgage rates fell for a second consecutive week, weighed by concerns over an economic slowdown.
  • While up for the current year, mortgage rates are down 24 basis points over the last two weeks.
  • However, rates are significantly higher than a year ago, leaving home purchase and refinance applications under pressure.
  • Affordability and low inventory continue to limit purchase activity.

For the week ahead

It is a quiet week ahead on the US economic calendar. There are no stats for the markets to consider ahead of US inflation figures on Wednesday.

Following last week’s less hawkish-than-expected FOMC meeting minutes, another spike in inflation would drive yields and mortgage rates higher.

June nonfarm payrolls impressed on Friday, delivering uncertainty over how the Fed will respond next week. The upbeat payroll numbers and another spike in inflation could force the FED to deliver a 75-basis point rate hike.

US Mortgage Rates Hit Reverse on US Economic Uncertainty

In the week ending June 30, mortgage rates fall for the first time in four weeks.

30-year fixed rates fell by 11 basis points. Reversing a 3-basis point rise from the previous week, the 30-year fixed ended the week at 5.7%.

Year-on-year, 30-year fixed rates were up by 272 basis points and 76 basis points since November 2018’s previous peak of 4.94%.

Economic Data from the Week

It was a relatively busy week on the US economic calendar. Key stats included core durable goods orders, consumer confidence, and finalized first quarter GDP numbers in focus.

The numbers were negative for riskier assets, supporting the pullback in mortgage rates.

In June, the CB Consumer Confidence Index fell from 103.2 to 98.7, which could translate to a fall in spending to add further pressure on the US economy.

On Wednesday, a downward revision to first quarter GDP numbers added to the bearish mood.

With the stats weighing, Fed Chair Powell commentary failed to soothe the markets.

Powell spoke on Wednesday, reinforcing the commitment to bring inflation to target at any costs.

Freddie Mac Rates

The weekly average rates for new mortgages, as of June 30, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by 11 basis points to 5.70%. This time last year, rates stood at 2.98%. The average fee rose from 0.8 points to 0.9 points.
  • 15-year fixed rates declined by 9 basis points to 4.83% in the week. Rates were up by 257 basis points from 2.26% a year ago. The average fee remained unchanged at 0.9 points.
  • 5-year fixed rates increased by 9 basis points to 4.50%. Rates were up by 196 basis points from 2.54% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • The surge in mortgage rates hit pause, with the markets grappling with the impact of inflation on monetary policy and the fears of a recession.
  • Housing sector activity found much-needed support, with house price appreciation normalizing at the end of the quarter.

Mortgage Bankers’ Association Rates

For the week ending June 24, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.98% to 5.84%. Points fell from 0.77 to 0.64 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA remained unchanged at 5.62%. Points declined from 1.18 to 1.15 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 5.49% to 5.42%. Points fell from 0.45 to 0.28 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 0.7%. The Index rose by 4.2% in the week prior.

The Refinance Index increased by 2% and was 80% lower than the same week one year ago. In the previous week, the Index fell by 3%.

The refinance share of mortgage activity increased from 29.7% to 30.3%. In the previous week, the share decreased from 31.7% to 29.7%.

According to the MBA,

  • While mortgage rates continue to see large swings, 30-year fixed rates were still well above rates seen a year ago.
  • A fall in mortgage rates led to a modest increase in refinance activity, though refinances remained 80% lower than a year ago.
  • Purchase activity has weakened in recent months, with average purchase loan amounts continuing a downward trend since March 2022.

For the week ahead

In a shortened week, factory orders, ISM Non-Manufacturing PMI, and JOLTs job openings are the key stats.

While job openings will draw interest, weakening service sector activity would fuel market fears of a US recession.

On the monetary policy front, the FOMC meeting minutes will also influence US Treasury Yields in the week.

With nonfarm payrolls due out later in the week, we could see risk aversion continue to hit riskier assets, which would support another fall in mortgage rates.

US Mortgage Rates Inch Higher on Powell Testimony

In the week ending June 23, mortgage rates rose for the third time in six weeks.

30-year fixed rates rose by three basis points to 5.81%. In the week prior, 30-year fixed rates surged by 55 basis points.

Year-on-year, 30-year fixed rates were up by 279 basis points and 87 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a quiet first half of the week, with no US stats to provide US Treasuries and mortgage rates with direction.

While there were no stats for the markets to consider, Fed Chair Powell gave testimony on Capitol Hill, which drew plenty of interest.

In line with market expectations, Fed Chair Powell discussed the need to continue hiking rates to bring inflation back to target.

According to FX Empire, Powell noted,

“We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.”

For riskier assets, Powell’s reference to the influence of incoming data and the economic outlook on the Fed interest rate path eased immediate concerns of a hard landing.

The relief was brief, however, with the Q&A session highlighting the Fed’s threat to the US economy.

Powell talked of the need to bring inflation to target at any cost, reigniting fears of a US recession driven by Fed monetary policy.

Freddie Mac Rates

The weekly average rates for new mortgages, as of June 23, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 3 basis points to 5.81%. This time last year, rates stood at 3.04%. The average fee fell from 0.9 points to 0.8 points.
  • 15-year fixed rates rose by 11 basis points to 4.92% in the week. Rates were up by 258 basis points from 2.34% a year ago. The average fee remained unchanged at 0.9 points.
  • 5-year fixed rates increased by 8 basis points to 4.41%. Rates were up by 188 basis points from 2.53% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Since the start of the year, fixed mortgage rates were up by more than two percentage points.
  • High house prices and rising rates are likely the reasons behind the downward trend in existing home sales.
  • Despite this, many potential homebuyers remain interested in purchasing a home.

Mortgage Bankers’ Association Rates

For the week ending June 17, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.65% to 5.98%. Points rose from 0.71 to 0.77 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 5.36% to 5.62%. Points rose from 1.00 to 1.18 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 5.25% to 5.49%. Points fell from 0.54 to 0.45 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 4.2%. The Index rose by 6.6% in the week prior.

The Refinance Index fell by 3% and was 77% lower than the same week one year ago. In the previous week, the Index increased by 4%.

The refinance share of mortgage activity decreased from 31.7% to 29.7%. In the previous week, the refinance share decreased from 32.2% to 31.7%.

According to the MBA,

  • Mortgage rates continued to rise, with the 30-year fixed mortgage rate hitting the highest level since November 2008.
  • The 30-year fixed mortgage rate saw the largest weekly increase since 2009.
  • Fed monetary policy delivered the rise, as mortgage rates responded to the Fed’s 75 basis point rate hike.
  • Over the last 12 months, refinance volume slumped by 77% due to mortgage rates doubling over the same period.
  • Purchase activity was 10% lower than a year ago despite a recent rise in purchase applications.
  • Mortgage rates and tight inventories continue to peg back purchasing activity.

For the week ahead

It is a relatively busy first half of the week, with key stats from the US, including durable goods and core durable goods orders, consumer confidence, and Q2 GDP numbers.

Barring any revisions to the GDP numbers, the core durable goods orders and consumer confidence figures will likely have the greatest influence on mortgage rates.

Central bank chatter will also provide direction, however, with Fed Chair Powell due to speak on Wednesday.

US Mortgage Rates Near 6% on the Fed Rate Hike and Outlook

In the week ending June 16, mortgage rates rose for the second time in five weeks.

30-year fixed rates surged by 55 basis points to 5.78%. In the week prior, 30-year fixed rates rose by 14 basis points.

Year-on-year, 30-year fixed rates were up by 285 basis points and by 84 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

On the economic data front, US wholesale inflation and retail sales were the key stats in the first half of the week.

A pickup in wholesale inflationary pressure and disappointing retail sales figures tested support for riskier assets.

While the stats drew interest, the Fed monetary policy decision and the FOMC projections were the key drivers.

The largest rate hike since 1994 and a median projection of the Federal Funds Rate hitting 3.8% in 2023 drove mortgage rates northwards.

Freddie Mac Rates

The weekly average rates for new mortgages, as of June 16, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates surged by 55 basis points to 5.78%. This time last year, rates stood at 2.93%. The average fee held steady at 0.9 points.
  • 15-year fixed rates jumped by 43 basis points to 4.81% in the week. Rates were up by 257 basis points from 2.24% a year ago. The average fee increased from 0.8 points to 0.9 points.
  • 5-year fixed rates increased by 21 basis points to 4.33%. Rates were up by 181 basis points from 2.52% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates surged by the largest one-week increase on record, driven by a shift in sentiment towards inflation and Fed monetary policy.
  • The rise in mortgage rates will lead to further moderation in housing sector activity to support a more balanced market.

Mortgage Bankers’ Association Rates

For the week ending June 10, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.40% to 5.65%. Points rose from 0.60 to 0.71 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 5.30% to 5.36%. Points rose from 0.79 to 1.00 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.99% to 5.25%. Points rose from 0.44 to 0.54 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 6.6%. The Index fell by 6.5% in the week prior.

The Refinance Index increased by 4% and was 76% lower than the same week one year ago. In the previous week, the Index fell by 6%.

The refinance share of mortgage activity decreased from 32.2% to 31.7%. In the previous week, the share increased from 31.5% to 32.2%.

According to the MBA,

  • Mortgage rates jumped to the highest level since 2008.
  • The upswing was aligned with Treasury yields that responded to higher than anticipated inflation figures and expectations of the Fed lifting rates at a faster pace.
  • Application activity rebounded despite the uptrend in mortgage rates.
  • Refinance activity remains more than 70% lower than last year due to elevated mortgage rates.
  • Purchase applications were down 15% year-on-year, weighed by supply and affordability issues that coincided with the upswing in mortgage rates.

For the week ahead

It is a quiet first half of the week. There are no material US stats for the markets to consider.

While there are stats to consider, Fed Chair Powell testimony on Wednesday will influence Treasury yields and mortgage rates.

Following last week’s FOMC projections and press conference, however, the markets will not be expecting a break from the script.

US Mortgage Rates Jump on Fed Rate Hike Expectations

In the week ending June 9, mortgage rates rose for the first time in four weeks.

30-year fixed rates jumped by 14 basis points to 5.23%. 30-year fixed rates had slipped by one basis point in the week prior.

Year-on-year, 30-year fixed rates were up by 227 basis points while down by seven basis points from the May 11 peak of 5.30%.

Economic Data from the Week

It was a particularly quiet first half of the week on the economic data front. With stats limited to US trade data, market jitters over inflation and the Fed’s interest rate path returned.

Rising crude oil prices added to the market angst over inflation, driving US mortgage rates higher.

For US mortgage rates, May’s nonfarm payroll figures supported the sharp rise in rates.

Freddie Mac Rates

The weekly average rates for new mortgages, as of June 9, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 14 basis points to 5.23%. This time last year, rates stood at 2.96%. The average fee rose from 0.8 points to 0.9 points.
  • 15-year fixed rates rose by six basis points to 4.38% in the week. Rates were up by 215 basis points from 2.23% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates increased by eight basis points to 4.12%. Rates were up by 157 basis points from 2.55% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates bounced back ahead of US inflation figures and in response to better-than-expected economic data.
  • The jump in rates weighed on housing demand, with purchase activity taking another hit.
  • A rising supply of homes for sale and weaker demand will cause a deceleration in price growth, delivering much-needed home-buyer relief.

Mortgage Bankers’ Association Rates

For the week ending June 3, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.33% to 5.40%. Points rose from 0.51 to 0.60 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 5.20% to 5.30%. Points rose from 0.69 to 0.79 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.93% to 4.99%. Points rose from 0.41 to 0.44 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 6.5%. The Index fell by 2.3% in the week prior.

The Refinance Index declined by 6% and was 75% lower than the same week one year ago. In the previous week, the Index fell by 5%.

The refinance share of mortgage activity increased from 31.5% to 32.2%. In the previous week, the share decreased from 32.3% to 31.5%.

According to the MBA,

  • Weakness in purchase and refinance applications weighed on the market index, which fell to its lowest level in 22 years.
  • While lower than four weeks ago, 30-year fixed rates continued to weigh on refinance activity.
  • Low housing inventory and rising mortgage rates have adversely affected the purchase market, impacting prospective first-time buyers.

For the week ahead

It is a big week ahead for the global financial markets. On Wednesday, the Fed delivers its June monetary policy decision.

While the interest rate decision is the key, the FOMC projections and the Fed’s forward guidance on rate hikes for the coming months will also be material.

On the economic data front, US wholesale inflation and retail sales figures on Tuesday and Wednesday will influence yields.

For mortgage rates, however, last Friday’s US inflation figures will likely place further upward pressure on rates.

US Mortgage Rates Fall for a Third Consecutive Week

In the week ending June 2, mortgage rates fell for the fourth time in thirteen weeks.

30-year fixed rates slipped by 1 basis point to 5.09%. 30-year fixed rates slid by 15 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 210 basis points.

30-year fixed rates were up by 15 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

In the first half of the week, consumer confidence and private sector PMIs were in focus.

The CB Consumer Confidence Index fell from 108.6 to 106.4 in May. Forecasts were for a larger decline to 103.9.

Manufacturing sector PMI numbers also came in better than expected.

The ISM manufacturing PMI rose from 55.4 to 56.1, easing market concerns of an economic recession. Economists forecast a fall to 54.5.

Freddie Mac Rates

The weekly average rates for new mortgages, as of June 2, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates slipped by 1 basis point to 5.09%. This time last year, rates stood at 2.99%. The average fee declined from 0.9 points to 0.8 points.
  • 15-year fixed rates rose by 1 basis point to 4.32% in the week. Rates were up by 205 basis points from 2.27% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates slid by 16 basis points to 4.04%. Rates were up by 140 basis points from 2.64% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates continued to decline but remained higher than last year, impacting affordability and purchase demand.
  • Going into the summer, housing supply is on the rise with the housing market normalizing.
  • A fall in the homebuyer pool has eased market tightness experienced in recent times.

Mortgage Bankers’ Association Rates

For the week ending May 27, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.46% to 5.33%. Points fell from 0.60 to 0.51 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 5.36% to 5.20%. Points fell from 0.82 to 0.69 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances declined from 5.02% to 4.93%. Points remained unchanged at 0.41 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 2.3%. The index fell by 1.2% in the previous week.

The Refinance Index declined by 5% and was 75% lower than the same week one year ago. In the week prior, the Index fell by 4%.

The refinance share of mortgage activity decreased from 32.3% to 31.5%. In the previous week, the share declined from 33.0% to 32.3%.

According to the MBA,

  • Mortgage rates declined for the fourth time in five weeks, with concerns over the economy and equity market sell-off weighing on Treasury yields.
  • The downward trend left mortgage rates at their lowest level since December 2018.
  • With mortgage rates still elevated, the refinance market continues to shrink.
  • Demand is higher at the upper end of the housing market, which is affected less by supply and affordability issues.

For the week ahead

It’s a quiet first half of the week in the week ending June 10.

There are no material stats for the markets to consider following last week’s nonfarm payroll numbers for May.

The lack of stats will leave US Treasuries and mortgage rates in the hands of market risk appetite and sentiment towards Fed monetary policy.

Early in the week, China’s service sector PMI numbers on Monday and trade data on Wednesday will influence market risk appetite.

US Mortgage Rates Slide for a Second Consecutive Week

In the week ending May 26, mortgage rates fell for the third time in twelve weeks.

30-year fixed rates slid by 15 basis points to 5.10%. 30-year fixed rates fell by 5 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 215 basis points.

30-year fixed rates were up by 16 basis points since November 2018’s previous peak of 4.94%.

Economic Data from the Week

In the first half of the week, prelim private sector PMIs for May and core durable goods orders for April were in focus.

The stats disappointed, the services PMI declining from 55.6 to 53.5.

Core durable goods orders also failed to impress, rising by just 0.3% versus a forecasted 0.6% increase.

With market jitters over the economy lingering, the numbers fueled concerns over the economic outlook.

On the monetary policy front, the FOMC meeting minutes failed to drive mortgage rates northwards.

The minutes were hawkish, showing member willingness to deliver multiple 50 basis point rate hikes. Aligned with previous Fed Chair Powell commentary, members were also willing to move beyond neutral to curb inflation.

While hawkish, the minutes did reveal a willingness to take the foot of the gas in the months ahead.

Freddie Mac Rates

The weekly average rates for new mortgages, as of May 26, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates slid by 15 basis points to 5.10%. This time last year, rates stood at 2.95%. The average fee remained unchanged at 0.9 points.
  • 15-year fixed rates declined by 12 basis points to 4.31% in the week. Rates were up by 204 basis points from 2.27% a year ago. The average fee fell from 0.9 points to 0.8 points.
  • 5-year fixed rates increased by 12 basis points to 4.20%. Rates were up by 161 basis points from 2.59% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Mortgage rates fell for a second consecutive week due to economic headwinds.
  • The housing market was under pressure, however, despite the fall in mortgage rates.
  • Other segments of the economy, including consumer spending on durable goods, also saw weaker conditions.

Mortgage Bankers’ Association Rates

For the week ending May 20, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.49% to 5.46%. Points fell from 0.74 to 0.60 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 5.32% to 5.36%. Points rose from 0.71 to 0.82 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances slipped from 5.03% to 5.02%. Points declined from 0.61 to 0.41 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 1.2%. The Index slid by 11% in the previous week.

The Refinance Index declined by 4% and was 75% lower than the same week a year ago. In the week prior the index slid by 10%.

The refinance share of mortgage activity decreased from 33.0% to 32.3%. In the previous week, the share increased from 32.4% to 33.0%.

According to the MBA,

  • The 30-year fixed rate fell for a second consecutive week but remained well above what borrowers paid over the last two years.
  • Most refinance borrowers remained on the sidelines, with refinance applications falling in nine of the last ten weeks.
  • Higher mortgage rates are also affecting the purchasing market, with the purchase index at its lowest level since spring 2020.

For the week ahead

It’s another relatively busy first half of the week ahead.

On Tuesday, US consumer confidence figures will be in focus ahead of ADP nonfarm employment change and ISM manufacturing PMI numbers.

The stats will influence demand for Treasuries. Weak numbers could send mortgage rates on the slide for a third consecutive week.

From China, private sector PMIs will also influence, along with news updates on COVID-19 lockdown measures.

US Mortgage Rates Fall for the Second Time in Eleven Weeks

In the week ending May 19, mortgage rates fell for the second time in eleven weeks.

30-year fixed rates declined by five basis points to 5.25%. 30-year fixed rates rose by 3 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 225 basis points.

30-year fixed rates were up by 31 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busy first half of the week. NY Empire State Manufacturing, retail sales, and industrial production were in focus.

The stats were mixed, with the NY Empire State Manufacturing Index sliding from 24.6 to -11.6.

Industrial production figures for April were upbeat, easing some of the market angst over the economic outlook. Production rose by 1.1% in April.

Retail sales created some uncertainty, however. Retail sales rose by 0.9% in April, following a 1.4% increase in March.

On the monetary policy front, Fed Chair Powell caused a stir on Tuesday, talking of a willingness to move beyond neutral to curb inflation. The hawkish chatter wasn’t enough, however, to offset the effect of investor jitters towards the economic outlook on mortgage rates.

From China, industrial production and retail sales figures disappointed on Monday, setting the bearish tone.

Freddie Mac Rates

The weekly average rates for new mortgages, as of May 19, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by five basis points to 5.25%. This time last year, rates stood at 3.00%. The average fee remained unchanged at 0.9 points.
  • 15-year fixed rates declined by five basis points to 4.43% in the week. Rates were up by 214 basis points from 2.29% a year ago. The average fee remained unchanged at 0.9 points.
  • 5-year fixed rates increased by ten basis points to 4.08%. Rates were up by 149 basis points from 2.59% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage volatility has picked up due to economic uncertainty, which has also weighed on purchase demand.
  • Homebuilder sentiment has waned to the lowest level in close to two years.
  • Rising costs are impacting builders, which could adversely impact builder sentiment further.

Mortgage Bankers’ Association Rates

For the week ending May 13, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 5.53% to 5.49%. Points rose from 0.73 to 0.74 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 5.37% to 5.32%. Points fell from 0.87 to 0.71 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 5.08% to 5.03%. Points rose from 0.42 to 0.61 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, decreased by 11%. The Index increased by 2.0% in the previous week.

The Refinance Index slid by 10% and was 76% lower than the same week one year ago. In the week prior, the Index declined by 2%.

The refinance share of mortgage activity increased from 32.4% to 33.0%. In the previous week, the share decreased from 33.9% to 32.4%.

According to the MBA,

  • Mortgage applications fell for the first time in three weeks, pressured by the upswing in mortgage rates.
  • Current mortgage rates also provide borrowers with little incentive to refinance.
  • Purchase applications slid by 12% last week, with higher rates and a deteriorating affordability environment weighing.
  • Uncertainty about the economic outlook and stock market volatility has also impacted buyer demand.

For the week ahead

It’s another relatively busy first half of the week ahead.

On Tuesday, US prelim private sector PMIs for May will draw plenty of attention. We expect plenty of market sensitivity to the services PMI as the markets assess economic conditions midway through the second quarter.

On Wednesday, core durable goods orders will also influence.

US Mortgage Rates Rise for the Ninth Time in Ten Weeks

In the week ending May 12, mortgage rates rose for the ninth time in ten weeks.

30-year fixed rates rose by three basis points to 5.30%. 30-year fixed rates jumped by 17 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 236 basis points.

30-year fixed rates were up by 36 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

Inflation was back in focus, which caused market turbulence mid-week.

In April, the annual rate of inflation softened from 8.5% to 8.3% versus a forecasted 8.1%. The core annual rate of inflation eased from 6.5% to 6.2%. While softer, inflation was stronger than anticipated, supporting the more hawkish sentiment towards Fed monetary policy.

Market jitters over the rising risk of a recession together with persistent inflation tested support for riskier assets.

Freddie Mac Rates

The weekly average rates for new mortgages, as of May 12, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by three basis points to 5.30%. This time last year, rates stood at 3.06%. The average fee remained unchanged at 0.9 points.
  • 15-year fixed rates fell by four basis points to 4.48% in the week. Rates were up by 222 basis points from 2.26% a year ago. The average fee increased from 0.8 points to 0.9 points.
  • 5-year fixed rates increased by two basis points to 3.98%. Rates were up by 139 basis points from 2.58% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Homebuyers showed resilience despite rising mortgage rates driving monthly payments up by around one-third compared with last year.
  • A surge of first-time buyers supported buying demand.
  • Monetary policy and inflation may discourage consumers in the months ahead, weakening purchase demand and slowing home price growth.

Mortgage Bankers’ Association Rates

For the week ending May 6, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 5.36% to 5.53%. Points rose from 0.63 to 0.73 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 5.27% to 5.37%. Points rose from 0.85 to 0.87 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.92% to 5.08 %. Points declined from 0.43 to 0.42 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 2.0%. The Index rose by 2.5% in the previous week.

The Refinance Index declined by 2% and was 72% lower than the same week one year ago. In the week prior, the Index rose by 0.2%.

The refinance share of mortgage activity decreased from 33.9% to 32.4% of total applications. In the previous week, the share decreased from 35.0% to 33.9%.

According to the MBA,

  • The increase in mortgage applications came despite mortgage rates hitting their highest level since 2009.
  • While it is a slow start to the spring homebuying season, prospective buyers are showing interest amidst the higher rate environment.
  • Purchase activity has increased for two consecutive weeks.
  • The sharp rise in mortgage rates continues to hit the refinance market, with activity down 70% from a year ago.

For the week ahead

On Tuesday, retail sales will be the area of focus.

While the numbers will influence, Fed Chair Powell and FOMC member chatter will also be the key in the week. The markets will be looking for Fed Chair Powell to back up comments from Friday and for members to align with his assurances.

Last Friday, the Fed Chair assured the markets that larger rate hikes were off the table.

Fed Chair Powell is to deliver a speech on Tuesday.

Away from the economic calendar, news updates from China on lockdown measures and from Ukraine and Russia will also influence.

US Mortgage Rates Spike Again as the Markets Respond to the Fed

In the week ending May 5, mortgage rates rose for the eighth time in nine weeks.

30-year fixed rates jumped by 17 basis points to 5.27%. 30-year fixed rates slipped by one basis point in the week prior.

Year-on-year, 30-year fixed rates were up by 231 basis points.

30-year fixed rates were up by 33 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

Private sector PMIs and nonfarm payrolls were the key stats in the first half of the week.

The numbers were dollar negative, with private sector PMI figures disappointing.

In April, the ISM Manufacturing PMI fell from 57.1 to 55.4, with the Non-Manufacturing PMI down from 58.3 to 57.1.

Labor market numbers were also dollar negative ahead of Friday’s NFP numbers. The ADP reported a 247k increase in nonfarm payrolls for April, falling short of forecasts, and a 479k rise in March.

While the stats were of interest, the Fed monetary policy decision and forward guidance were the key drivers in the week.

On Wednesday, the Fed delivered a 50-basis point rate hike, in line with forecasts. Fed Chair Powell also looked to calm the markets by assuring that 75 basis point hikes would not be on the table.

Freddie Mac Rates

The weekly average rates for new mortgages, as of May 3, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 17 basis points to 5.27% in the week. This time last year, rates stood at 2.96%. The average fee increased from 0.8 points to 0.9 points.
  • 15-year fixed rates rose by 12 basis points to 4.52% in the week. Rates were up by 222 basis points from 2.30% a year ago. The average fee decreased from 0.9 points to 0.8 points.
  • 5-year fixed rates increased by 18 basis points to 3.96%. Rates were up by 126 basis points from 2.70% a year ago. The average fee declined from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage rates hit their highest level since 2009 as the upward trend resumed in the first week of May.
  • House price growth will continue, though the pace of growth is expected to moderate due to affordability and inflationary pressures.

Mortgage Bankers’ Association Rates

For the week ending April 29, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances fell from 5.37% to 5.36%. Points decreased from 0.67 to 0.63 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 5.29% to 5.27%. Points fell from 0.88 to 0.85 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.89% to 4.92%. Points declined from 0.47 to 0.43 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased 2.5% in the week ending April 29. The Index decreased by 8.3% in the previous week.

The Refinance Index rose by 0.2% and was 71% lower than the same week one year ago. In the week prior, the Index fell by 9%.

The refinance share of mortgage activity decreased from 35.0% to 33.9% of total applications. In the previous week, the share decreased from 35.7% to 35.0%.

According to the MBA,

  • Treasury yields eased slightly last week, though held close to 4-year highs as the markets looked ahead to the Fed and its policy plans.
  • Purchase applications increased, a positive sign for the sector’s peak spring home buying season.
  • Low inventory levels and rising house prices remain housing sector negative for prospective home buyers.

For the week ahead

Inflation is back in the spotlight, with consumer inflation figures to draw investor interest on Wednesday.

Another spike in inflation would test support for riskier assets following the Fed’s forward guidance last week.

FOMC member chatter will also need monitoring along with trade data and inflation figures from China.

On the geopolitical risk front, the war in Ukraine will remain the area of focus.