U.S Mortgage Rates Slide but Avoid sub-3%

Mortgage rates hit reverse ahead of the holidays, with volatility stemming from the Omicron strain weighing. In the week ending 23rd December, 30-year fixed rates fell by 7 basis point to 3.05%.

30-year fixed rates held above the 3% mark for a 6th consecutive week in spite of the decline.

Compared to this time last year, 30-year fixed rates were up by 39 basis points. 30-year fixed rates were still down by 189 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a quiet first half of the week on the U.S economic data front. Finalized 3rd quarter GDP and December consumer confidence figures were in focus. Upbeat numbers were not enough to offset concerns over the Omicron strain.

In the 3rd quarter, the U.S economy expanded by 2.3%, which was up from a previous estimate of 2.1%.

More significantly, consumer confidence improved at the end of the year. This was in spite of the Omicron strain, rising consumer prices, and a shift in FED guidance on interest rates.

In December, the CB Consumer Confidence Index rose from 111.9 to 115.8.

Freddie Mac Rates

The weekly average rates for new mortgages as of 23rd December were quoted by Freddie Mac to be:

  • 30-year fixed rates declined by 7 basis points to 3.05% in the week. This time last year, rates had stood at 2.66%. The average fee rose from 0.6 points to 0.7 points.
  • 15-year fixed decreased by 4 basis points to 2.30% in the week. Rates were up by 11 basis points from 2.19% a year ago. The average fee held steady at 0.7 points.
  • 5-year fixed rates slid by 8 basis points to 2.37%. Rates were down by 42 points from 2.79% a year ago. The average fee increased from 0.3 points to 0.4 points.

According to Freddie Mac,

  • The market volatility resulting from the COVID-19 Omicron variant is causing mortgage rates to decrease.
  • As the year comes to a close, the housing market is proceeding steadily.
  • However, rates are expected to increase in 2022, which will impact homebuyer demand as well as refinance activity.

Mortgage Bankers’ Association Rates

For the week ending 17th December, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances fell from 3.30% to 3.27%. Points increased from 0.39 to 0.41 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.37% to 3.34%. Points increased from 0.34 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.32% to 3.31%. Points fell from 0.30 to 0.27 (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, decreased by 0.6% in the week ending 17th December. The Index had fallen by 4.0% in the week prior.

The Refinance Index rose by 2% from the previous week and was 42% lower than the same week one year ago. In the previous week, the Index had fallen by 6%. The refinance share of mortgage activity increased from 63.3% to 65.2%. The share had decreased from 63.9% to 63.3% in the previous week.

According to the MBA,

  • Mortgage applications fell last week, driven by a 3% decline in purchase applications.
  • In spite of the decline, the average purchase loan increased for a 2nd consecutive week to $416,200. This was the 2nd highest level ever.
  • The elevated loan size is an indication that activity is more on the higher end of the market.
  • Home-price appreciation growth remains faster than historical averages.
  • Inventories, particularly for starter homes, continue to trail strong demand.

For the week ahead

It’s a quiet first half of the week on the U.S economic calendar. Trade data and inventories will be in focus on Wednesday, along with housing sector figures. The stats are unlikely to have a material impact on yields, however.

MBA’s office will be closed and reopen on Monday 3rd, 2022. The MBA will therefore release its rates for 24th and 31st December on 5th January.

U.S Mortgage Rates Inch Up ahead of the Holidays

Mortgage rates were on the rise after 3 weeks of hovering. The rise came off the back of positive stats and a shift in FED monetary policy guidance.

In the week ending 16th December, 30-year fixed rates rose by 2 basis point to 3.12%.

Compared to this time last year, 30-year fixed rates were up by 45 basis points.

30-year fixed rates were still down by 182 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busy first half of the week on the U.S economic data front, with wholesale inflation and retail sales in focus.

A further pickup in wholesale inflationary pressures and softer than expected consumer spending tested support for riskier assets.

In November, the U.S core annual rate of wholesale inflation accelerated from 7.0% to 7.7%.

Core retail sales rose by just 0.3%, however, after having risen by 1.8% in October. Economists had forecast a 0.9% rise.

Ultimately, however, it was the FOMC monetary policy decision and economic projections that moved the markets.

In line with expectations, the FED announced a faster end to the asset purchasing program. To combat inflation, the FED also projected 3 rate hikes for next year. This was up from the September projections.

Freddie Mac Rates

The weekly average rates for new mortgages as of 16th December were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 2 basis points to 3.12% in the week. This time last year, rates had stood at 2.67%. The average fee fell from 0.7 points to 0.6 points.
  • 15-year fixed decreased by 4 basis points to 2.34% in the week. Rates were up by 13 basis points from 2.21% a year ago. The average fee held steady at 0.7 points.
  • 5-year fixed rates remained unchanged at 2.45%. Rates were down by 34 points from 2.79% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates inched up as a result of economic improvement and a shift in monetary policy guidance.
  • While house price growth is slowing, prices remain high due to solid housing demand and low supply.
  • We expect rates to continue to increase into 2022, which may leave some potential homebuyers, with less room in their budgets, on the sideline.

Mortgage Bankers’ Association Rates

For the week ending 10th December, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.30%. Points held steady at 0.39 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.35% to 3.37%. Points increased from 0.32 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.33% to 3.32%. Points remained unchanged at 0.30 (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, decreased by 4.0% in the week ending 10th December. The inde had increased by 2.0% in the week prior.

The Refinance Index fell by 6% from the previous week and was 41% lower than the same week one year ago. In the previous week, the index had increased by 9%. The refinance share of mortgage activity decreased from 63.9% to 63.3%. The share had increased from 59.4% to 63.9% in the previous week.

According to the MBA,

  • Applications to refinance fell over the week, despite the 30-year fixed rate remaining at 3.30%.
  • With rates more than 40 basis points higher than last year, applications were down 41% on an annual basis.
  • Fewer homeowners have a strong incentive to refinance at current rates.
  • Purchase activity increased slightly.
  • House demand remains strong as the year comes to an end amidst tight inventory and steep home-price growth.

For the week ahead

It’s a quieter first half of the week on the U.S economic calendar.

Economic data from the U.S is limited to finalized 3rd quarter GDP numbers on Wednesday. Barring marked revisions to the GDP numbers, we don’t expect the numbers to affect rates.

Away from the economic calendar, Omicron news updates will continue to be an area of interest, however.

U.S Mortgage Rates Hold Steady for a 3rd Consecutive Week

Mortgage rates hovered for a 3rd consecutive week. A modest decline ensured that 30-year fixed rates continued to sit above the 3% mark as the year end approaches.

In the week ending 9th December, 30-year fixed rates slipped by 1 basis point to 3.10%.

Compared to this time last year, 30-year fixed rates were up by 39 basis points.

30-year fixed rates were still down by 184 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a quiet 1st half of the week. Economic data included 3rd quarter nonfarm productivity and unit labor cost and trade data on Tuesday ahead of JOLT’s job openings on Wednesday.

Wednesday’s JOLT’s job openings rose from 10.602m to 11.033m in October, which was the key stat early in the week.

While the stats were skewed to the positive, with the U.S trade deficit narrowing and unit labor costs in the rise, market sentiment towards the Omicron strain pegged rates back in the week.

Freddie Mac Rates

The weekly average rates for new mortgages as of 9th December were quoted by Freddie Mac to be:

  • 30-year fixed rates slipped by 1 basis point to 3.10% in the week. This time last year, rates had stood at 2.71%. The average fee rose from 0.6 points to 0.7 points.
  • 15-year fixed decreased by 1 basis point to 2.38% in the week. Rates were up by 12 basis points from 2.26% a year ago. The average fee increased from 0.6 points to 0.7 points.
  • 5-year fixed rates fell by 4 basis points to 2.45%. Rates were down by 34 points from 2.79% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates have moved sideways over the last several weeks, fluctuating within a narrow range.
  • Going forward, the path that rates take will be directly impacted by more information about the Omicron strain and the overall trajectory of the pandemic.
  • In the meantime, rates remain low and stable, even as the nation faces declining housing affordability and low inventory.

Mortgage Bankers’ Association Rates

For the week ending 3rd December, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.31% to 3.30%. Points decreased from 0.43 to 0.39 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.42% to 3.35%. Points decreased from 0.35 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.27% to 3.33%. Points fell from 0.35 to 0.30 (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, increased by 2.0% in the week ending 3rd December. The index had decreased by 7.2% in the week prior. The Refinance Index increased by 9% and was 37% lower than the same week one year ago. In the previous week, the index had tumbled by 15%.

The refinance share of mortgage activity increased from 59.4% to 63.9%. The share had decreased from 63.1% to 59.4% in the previous week.

According to the MBA,

  • Mortgage rates fell for the 1st time in a month, supporting a pickup in refinancing.
  • The purchase market was slower last week with applications falling after 4 consecutive increases.
  • Activity is still close to its highest level since Mar-2021, a positive sign as the year comes to an end.
  • Purchase activity continues to be constrained by a lack of inventory, combined with rapid rates of home-appreciation and mortgage rates higher than in 2020.

For the week ahead

It’s a busier first half of the week on the U.S economic calendar.

On Tuesday, wholesale inflation will be in focus ahead of retail sales and private sector PMIs on Wednesday.

While the stats will influence, however, the FED policy decision and economic projections late on Wednesday will be key, however.

Away from the economic calendar, Omicron news updates will continue to influence.

U.S Mortgage Rates Continue to Hold Above the 3% Mark in Spite of Omicron

Mortgage rates rose for just the 2nd time in 5-weeks after having held steady in the week prior.

A modest increase ensured that 30-year fixed rates continued to sit above the 3% mark after the Thanksgiving holidays.

In the week ending 2nd December, 30-year fixed rates rose by 1 basis point to 3.11%.

Compared to this time last year, 30-year fixed rates were up by 40 basis points.

30-year fixed rates were still down by 183 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busy 1st half of the week, with economic data and monetary policy in focus.

On the economic data front, the stats were mixed in the early part of the week.

In November, the CB Consumer Confidence Index fell from 111.6 to 109.5, with inflation and COVID-19 weighing.

Mid-week, ADP nonfarm employment change and manufacturing sector PMIs were positive, however.

For November, the ADP reported a 534k increase in nonfarm payrolls after having risen by 570k in October.

According to the ISM survey, the manufacturing PMI rose from 60.8 to 61.1.

Early in the week, FED Chair Powell also delivered 2-days of testimony on Capitol Hill. Powell talked of the need to discuss accelerating the tapering of bond purchases at the next FOMC meeting. The FED Chair also said that the FED should end the use of transitory when referencing the current spike in inflation.

While the stats and FED Chair Powell’s comments were supportive of a pickup in yields, concerns over COVID-19 tempered a breakout.

Uncertainty over the efficacy of existing vaccines against the new Omicron strain weighed on market risk appetite in the week.

Freddie Mac Rates

The weekly average rates for new mortgages as of 2nd December were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 1 basis point to 3.11% in the week. This time last year, rates had stood at 2.71%. The average fee fell from 0.7 points to 0.6 points.
  • 15-year fixed decreased by 3 basis points to 2.39% in the week. Rates were up by 13 basis points from 2.26% a year ago. The average fee decreased from 0.7 points to 0.6 points.
  • 5-year fixed rates rose by 2 basis point to 2.49%. Rates were down by 37 points from 3.86% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates remained stable notwithstanding volatility in the financial markets.
  • The consistency of rates in the face of changes in the economy is primarily due to the evolution of the pandemic, which lingers and continues to pose uncertainty.
  • This low mortgage rate environment offers favorable conditions for refinancing.

Mortgage Bankers’ Association Rates

For the week ending 26th November, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.24% to 3.31%. Points increased from 0.36 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.27% to 3.42%. Points increased from 0.34 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.28% to 3.27%. Points rose from 0.26 to 0.35 (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, decreased by 7.2% in the week ending 26th November. In the previous week, the index had increased by 1.8%.

The Refinance Index slid by 15% and was 41% lower than the same week one year ago. In the week prior, index had increased by 0.4%.

The refinance share of mortgage activity decreased from 63.1% to 59.4%. In the previous week, the share had increased from 62.9% to 63.1%.

According to the MBA,

  • Mortgage rates rose for the 3rd week in a row, reducing the refinance incentive for many borrowers.
  • The 30-year fixed rate hit 3.31%, the highest level since April, leading to the slide in refinance applications.
  • Over the past 3-weeks, rates are up 15 basis points and refinance activity has declined over 18%.
  • Despite higher mortgage rates, purchase applications had a strong week.
  • As home-price appreciation continues at a double-digit pace, buyers of newer, pricier homes continue to dominate purchase activity, while the share of first-time buyer activity remains depressed.

For the week ahead

It’s a quiet first half of the week on the U.S economic calendar.

On Tuesday, nonfarm productivity and unit labor costs will be in focus alongside trade data. The numbers are unlikely to have a material impact on 10-year Treasury yields and mortgage rates, however.

JOLT’s job openings on Wednesday, will likely garner greater interest following disappointing NFP numbers from last Friday.

Away from the economic calendar, however, COVID-19 news updates will continue to influence.

U.S Mortgage Rates Hold Steady. COVID-19 Could Send Rates back below 3%, However

Mortgage rates held steady after having risen for the first time in 3-weeks in the week prior.

As a result of the hold, 30-year fixed rates continued to sit above the 3% mark going into the Thanksgiving holidays. In the week ending 25th November, 30-year fixed rates remained unchanged at 3.10%.

Compared to this time last year, 30-year fixed rates were up by 38 basis points.

30-year fixed rates were still down by 184 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busy 1st half of the week on the economic data front.

Early in the week, prelim private sector PMIs were in focus, with the numbers skewed to the negative.

While the manufacturing PMI rose from 58.4 to 59.1, the all-important services PMI declined from 58.7 to 57.0. As a result, the Composite PMI fell from 58.7 to 57.0.

Ahead of the Thanksgiving holidays, a particularly busy set of numbers also drew plenty of interest.

Personal spending rose by 1.3%, with jobless claims falling from 270k to 199k in the week ending 19th November.

Core durable goods orders were also positive, rising by 0.5% in October, with inflationary pressures picking up once more.

The FED’s preferred core PCE price index rose by 4.1%, year-on-year in October. In September, the index had risen by 3.7%.

GDP numbers for the 3rd quarter fell short of estimates, however. In the 3rd quarter, the economy expanded by 2.1%, falling short of a forecasted 2.2%. The economy had expanded by 6.7% in the previous quarter.

On Wednesday, the FOMC meeting minutes were also in focus. With FED Chair Powell’s reappointment and minutes revealing members acknowledging that inflationary pressures are unlikely to ease near-term, market sentiment towards FED policy also turned more hawkish.

Freddie Mac Rates

The weekly average rates for new mortgages as of 25th November were quoted by Freddie Mac to be:

  • 30-year fixed rates held steady at 3.10% in the week. This time last year, rates had stood at 2.72%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed increased by 3 basis points to 2.42% in the week. Rates were up by 14 basis points from 2.28% a year ago. The average fee increased from 0.6 points to 0.7 points.
  • 5-year fixed rates slipped by 2 basis point to 2.47%. Rates were down by 69 points from 3.16% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Despite the noise around the economy, inflation, monetary policy, mortgage rate volatility has been low.
  • For most of 2021, mortgage rates have stayed within half a percentage point, which is a smaller range than in past years.

Mortgage Bankers’ Association Rates

For the week ending 19th November, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.20% to 3.24%. Points decreased from 0.43 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.23% to 3.27%. Points decreased from 0.41 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.26% to 3.28%. Points fell from 0.39 to 0.26 (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, increased by 1.8% in the week ending 19th November. In the previous week, the index had fallen by 2.8%.

The Refinance Index increased by 0.4% and was 34% lower than the same week one year ago. In the week prior, the index had fallen by 5%.

The refinance share of mortgage activity increased from 62.9% to 63.1%. In the previous week, the share had fallen from 63.5% to 62.9%.

According to the MBA,

  • The financial markets continue to discern the FED’s policy path in the coming months in light of the current high growth, high inflation environment.
  • Despite a fair amount of rate volatility in the last week, mortgage rates were higher.
  • Refinance applications also increased, however, in spite of the pickup in rates.
  • Borrowers continue to lock in mortgages in anticipation of higher rates in the future.
  • Refinance applications were still more than 30% below a year ago, when the 30-year fixed rate was 32 basis points lower.
  • Purchase activity increased for the 3rd straight week, as housing demand remains robust.

For the week ahead

It’s a busy first half of the week on the U.S economic calendar.

On Tuesday, consumer confidence will be in focus ahead of ADP nonfarm and ISM Manufacturing PMI figures on Wednesday.

FED Chair Powell testimony will also garner plenty of interest in the week.

While the data set and Powell will influence Treasury yields in the week, COVID-19 news updates will likely be the key driver.

A slide in mortgage rates could be on the cards should the latest strain of COVID-19 prove to be vaccine resilient.

U.S Mortgage Rates Bounce Back, Driven by Upbeat U.S Economic Data and Inflation

Mortgage rates rose for the 1st time in 3-weeks, marking a 4th increase in 6-weeks

The pickup in mortgage rates saw 30-year fixed break back through the 3% mark.

In the week ending 18th November, 30-year fixed rates rose by 12 basis points to 3.10%.

Compared to this time last year, 30-year fixed rates were up by 38 basis points.

30-year fixed rates were still down by 184 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

Through the 1st half of the week, retail sales figures impressed, in spite of the marked pickup in inflationary pressure.

In October, core retail sales rose by 1.7%, with retail sales also up 1.7%. Retail sales had risen by 0.5% in September, with core retail sales having risen by 0.70%.

Freddie Mac Rates

The weekly average rates for new mortgages as of 18th November were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 12 basis points to 3.10% in the week. This time last year, rates had stood at 2.72%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed also jumped by 12 basis points to 2.39% in the week. Rates were up by 11 basis points from 2.28% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates slipped by 4 basis point to 2.49%. Rates were down by 36 points from 2.85% a year ago. The average fee remained fell from 0.4 points to 0.3 points.

According to Freddie Mac,

  • The combination of rising inflation and consumer spending drove mortgage rates higher.
  • Shoppers looking to buy a home are fueling strong demand while ongoing inventory shortages are not improving in the presence of higher home prices.

Mortgage Bankers’ Association Rates

For the week ending 12th November, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.16% to 3.20%. Points remained increased from 0.34 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.18% to 3.23%. Points increased from 0.31 to 0.41 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances remained unchanged at 3.26%. Points rose from 0.32 to 0.39 (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, fell by 2.8% in the week ending 12th November. In the previous week, the index had increased by 5.5%.

The Refinance Index fell by 5% and was 31% lower than the same week a year ago. In the week prior, the index had risen by 7%.

The refinance share of mortgage activity decreased from 63.5% to 62.9%. In the previous week, the share had increased from 61.9% to 63.5% of total applications.

According to the MBA,

  • Refinance applications declined for the 7th time in 8-weeks, as mortgage rates moved higher after 2-weeks of declines.
  • Activity has been particularly sensitive to rate movements.
  • Purchase applications increased for both conventional and government loan segments.
  • Household demand continues to show resilience at a time when home buying activity typically slows.
  • The 2nd straight increase in purchase applications suggests that stronger sales activity may continue in the weeks to come.
  • Despite elevated demand, purchase applications were 5.7% lower than a year ago.

For the week ahead

It’s a busy first half of the week on the U.S economic calendar.

On Tuesday, prelim November private sector PMIs are due out, with the services PMI the key stat of the day.

With the U.S markets closed on Thursday; a particularly busy economic calendar will also influence on Wednesday.

Key stats include 3rd quarter GDP, personal spending, inflation, and core durable goods orders.

On the monetary policy front, the FOMC meeting minutes will also draw plenty of attention.

Away from the economic calendar, however, COVID-19 news from Europe will also need considering.

U.S Mortgage Rates Hit Reverse and Return to sub-3%

Mortgage rates fell for a 2nd consecutive week, marking a 2nd decline in 5-weeks.

The fall also saw 30-year fixed rates fall back to sub-3% after having held above the 3% mark for 4 weeks in a row.

In the week ending 11th November, 30-year fixed rates slid by 11 basis points to 2.98%.

Compared to this time last year, 30-year fixed rates were up by 14 basis points.

30-year fixed rates were still down by 196 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar, with inflation in focus.

In October, the core producer price index rose by 0.4% after having increased by 0.2% in September. The producer price index rose by 0.6% following a 0.5% increase in September.

Economists had forecast the core PPI to rise by 0.5% and for the PPI to increase by 0.6%.

The annual core rate of wholesale inflation held steady at 6.8%, which was in line with forecasts.

Of greater significance, however, were consumer price inflation.

Consumer prices rose by 0.9% in October following a 0.4% increase in September.

More significantly, the core annual rate of inflation accelerated from 4.0% to 4.6. Economists had forecast an annual core inflation rate of 4.3%.

Month-on-month, core consumer prices increased by 0.6% following a 0.2% rise in the month prior.

On the labor market front, jobless claims failed to draw attention, with the inflation figures taking the limelight.

In the week ending 5th November, initial jobless claims fell from 271k to 267k.

Freddie Mac Rates

The weekly average rates for new mortgages as of 11th November were quoted by Freddie Mac to be:

  • 30-year fixed rates slid by 11 basis points to 2.98% in the week. This time last year, rates had stood at 3.12%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed fell by 8 basis points to 2.27% in the week. Rates were down by 7 basis points from 2.34% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates slipped by 1 basis point to 2.53%. Rates were down by 58 points from 3.11% a year ago. The average fee remained rose from 0.3 points to 0.4 points.

According to Freddie Mac,

  • Despite the re-acceleration of economic growth, the recent bond rally drove mortgage rates down for a 2nd consecutive week.
  • These low mortgage rates, combined with the tailwind of first-time buyers entering the market, means that purchase demand will remain strong into next year.
  • Affordability pressures, however, continue to be an ongoing concern for homebuyers.

Mortgage Bankers’ Association Rates

For the week ending 5th November, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.24% to 3.16%. Points remained unchanged at 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.29% to 3.18%. Points declined from 0.38 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.29% to 3.26%. Points rose from 0.27 to 0.32 (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, increased by 5.5% in the week ending 5th November. In the previous week, the index had decreased by 3.3%.

The Refinance Index rose by 7% and was 28% lower than the same week a year ago. In the week prior, the index had declined by 4%.

The refinance share of mortgage activity increased from 61.9% to 63.5% of total applications in the week ending 5th November. In the precious week, the share had decreased from 62.2% to 61.9%.

According to the MBA,

  • Mortgage rates moved lower for the second week in a row for all loan types.
  • While overall activity remains close to Jan-2020 lows, homebuyers acted on the decrease in rates.
  • The average loan balance for a refinance application was the highest in a month.
  • While the dip in rates may have helped bring some buyers back into the market housing inventory remains extremely low and price growth remains elevated.

For the week ahead

It’s a busy first half of the week on the U.S economic calendar.

On Tuesday, retail sales figures will be the key stats of the week. With inflationary pressures picking up, the markets will be looking to see the impact of inflation on consumption.

Expect weak numbers to bring into question the FED’s current transitory view and willingness to allow prices to remain elevated.

Other stats include NY Empire State Manufacturing, industrial production, and housing sector data.

We expect these stats to play second fiddle to the retail sales data, however.

U.S Mortgage Rates Hit Reverse but Avoid sub-3%

Mortgage rates hit reverse for the first time in 4-weeks.

In spite of the decline, 30-year fixed rates stood above the 3% line for the 6th time since 21st April.

In the week ending 4th November, 30-year fixed rates decreased by 5 basis points to 3.09%.

Compared to this time last year, 30-year fixed rates were up by 31 basis points.

30-year fixed rates were still down by 175 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 on the U.S economic calendar.

The market’s preferred ISM private sector PMIs and the ADP’s nonfarm employment figures were key stats early in the week.

While manufacturing sector activity saw slightly slower growth, a marked pickup in service sector activity was market positive.

In October, the ISM Manufacturing PMI fell from 61.1 to 60.8. The Non-Manufacturing PMI, by contrast, jumped from 61.9 to 66.7.

On the employment front, the ADP numbers were also upbeat ahead of the official numbers on Friday.

In October, nonfarm payrolls increased by 571k, following on from a 523k rise in September.

While the stats were skewed to the positive, it was the FED’s monetary policy decision and forward guidance that garnered the greatest interest.

In line with market expectations, the FED delivered on the tapering front. Uncertainty over whether the FED need to address inflationary pressure were also addressed, however. The FED Chair stood by the transitory script, taking rate hikes off the table near-term.

Freddie Mac Rates

The weekly average rates for new mortgages as of 4th November were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by 5 basis points to 3.09% in the week. This time last year, rates had stood at 2.78%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed slipped by 2 basis points to 2.35% in the week. Rates were up by 3 basis points from 2.32% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates declined by 2 basis points to 2.54%. Rates were down by 35 points from 2.89% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • While mortgage rates fell after several weeks on the rise, expectations are for further increases due to economic data and a FED pullback on stimulus.
  • The housing market remains favorable for consumers, however, as rates remain below pre-pandemic levels and continue to support sustainable purchase and refinance opportunities.

Mortgage Bankers’ Association Rates

For the week ending 29th October, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.30% to 3.24%. Points remained unchanged at 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.31% to 3.29%. Points remained unchanged at 0.38 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.34% to 3.29%. Points fell from 0.29 to 0.27 (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, decreased by 3.3% in the week ending 29th October. In the previous week, the index had increased by 0.3%.

The Refinance Index declined by 4% and was 33% lower than the same week a year ago. In the week prior, the index had fallen by 2%.

The refinance share of mortgage activity decreased from 62.2% to 61.9% in the week ending 29th October. In the previous week, the share had fallen from 63.3% to 62.2% of total applications.

According to the MBA,

  • Mortgage rates decreased for the first time since August.
  • Concerns about supply-chain bottlenecks, waning consumer confidence, weaker economic growth, and rising inflation pushed yields lower.
  • Refinance applications declined to the lowest level since Jan-2020, with the overall share falling to the lowest since Jul-2021.
  • Government refinance applications fell for the 6th straight week, as it becomes evident that an increasing number of borrowers have already refinanced.
  • High prices and low for-sale inventory continue to peg back purchase activity. Current applications, however, still point to healthy housing demand.

For the week ahead

It’s a quieter first half of the week on the U.S economic calendar.

The stats will influence, however, with inflation back in the limelight.

On Tuesday, wholesale inflation figures will be in focus ahead of consumer prices on Wednesday.

Expect both sets of numbers to have an impact on yields in the first half of the week.

Central bank chatter will also provide direction.

From China, trade data from the weekend and inflation figures on Wednesday will also impact market risk sentiment.

U.S Mortgage Rates Rise for a 3rd Consecutive Week

Mortgage rates were on the rise again, holding onto 3% levels for the 5th time since 21st April.

In the week ending 28th October, 30-year fixed rates increased by 5 basis points to 3.14%.

Compared to this time last year, 30-year fixed rates were up by 33 basis points.

30-year fixed rates were still down by 180 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busier first half of the week on the U.S economic calendar.

Consumer confidence and core durable goods orders were key stats early in the week.

The numbers were skewed to the positive, with consumer confidence seeing a marked improvement.

In October, the CB Consumer Confidence Index rose from 109.8 to 113.8.

Core durable goods increased by 0.4% following a 0.3% rise in August, which was also market positive.

With persistent inflationary pressure, the numbers supported U.S Treasury yields, as the markets looked ahead to the FED policy decision this coming week.

Freddie Mac Rates

The weekly average rates for new mortgages as of 28th October were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 5 basis points to 3.14% in the week. This time last year, rates had stood at 2.81%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed increased by 4 basis points to 2.37% in the week. Rates were up by 5 basis points from 2.32% a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates rose by 2 basis points to 2.56%. Rates were down by 32 points from 2.88% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • The yield on the 10-year Treasury note has been trending up due to the decline in new COVID-19 cases.
  • Also contributing has been improving consumer confidence and broadening inflation and persistent shortages.
  • While mortgage rates are rising, purchase demand remains firm, showing that latent purchase demand exists among consumers.

Mortgage Bankers’ Association Rates

For the week ending 22nd October, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.23% to 3.30%. Points decreased from 0.35 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.17% to 3.31%. Points increased from 0.32 to 0.38 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.26% to 3.34%. Points fell from 0.33 to 0.29 (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, increased by 0.3% in the week ending 22nd October. In the previous week, the index had fallen by 6.3%.

The Refinance Index declined by 2% and was 26% lower than the same week a year ago. In the week prior, the index had tumbled by 7%.

The refinance share of mortgage activity fell from 63.3% to 62.2% in the week ending 22nd October. In the previous week, the share had fallen from 63.9% to 63.3% of total applications.

According to the MBA,

  • Mortgage rates increased again last week, as the 30-year fixed rate and the 15-year fixed rate hit their highest levels in 8-months.
  • As a result of the uptrend, refinance activity fell for a 5th straight week to its slowest weekly pace since Jan-2020.
  • Higher rates continue to reduce borrowers’ incentive to refinance.
  • Purchase applications picked up slightly, and the average loan size rose to its highest level in 3-weeks.
  • Growth in the higher price segments continues to dominate purchase activity.
  • Last month, both new and existing home sales were at their strongest sales pace since early in the year.
  • First-time home buyers are accounting for a declining share of activity, however.
  • Home prices are still growing at a rapid clip, even if monthly growth rates are showing signs of moderation.

For the week ahead

It’s a busier first half of the week on the U.S economic calendar.

At the start of the week, ISM Manufacturing PMI numbers will set the tone. While the headline figure will be key, the inflation, employment, and new orders sub-components will also influence.

On Wednesday, the focus will then shift to ADP nonfarm employment change figures and the ISM Non-Manufacturing PMI.

Both sets of numbers will also provide direction.

The main event of the week, however, will be the FED monetary policy decision on Wednesday. Tapering and the FED’s outlook on inflation and interest rates will be key…

U.S Mortgage Rates Rise Again. The Upward Trend Looks Set to Continue…

Mortgage rates were on the rise once more, holding onto 3% levels for just the 4th time since 21st April.

In the week ending 21st October, 30-year fixed rates increased by 4 basis points to 3.09%.

Compared to this time last year, 30-year fixed rates were up by 29 basis points.

30-year fixed rates were still down by 185 basis points since November 2018’s last peak of 4.94%, however.

Economic Data from the Week

It was a quiet first half of the week on the U.S economic calendar.

While on the quieter side, the stats were skewed to the negative.

In September, industrial production fell by 1.3%, following a 0.1% decline in August.

Housing sector data also disappointed.

Building permits slid by 7.7% in September, with housing starts declining by 1.6%. In August, building permits had risen by 5.6% and housing starts by 1.2%.

From China, economic data also weighed on riskier assets, with the Chinese economy growing at a snails pace in the 3rd quarter.

The numbers were not weak enough, however, to send mortgage rates back to sub-3%, with the markets now looking towards a tapering next month and possibly more in the new year.

Freddie Mac Rates

The weekly average rates for new mortgages as of 21st October were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 4 basis points to 3.09% in the week. This time last year, rates had stood at 2.80%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed increased by 3 basis points to 2.33% in the week. Rates were unchanged from a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates slipped by 1 basis point to 2.54%. Rates were down by 33 points from 2.87% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Mortgage rates continued to rise this week due to the trajectory of both the economy and the pandemic.
  • Even as the availability of existing homes is improving, prices remain high due to homebuyer demand and limitations on housing starts and permits.
  • Ongoing labor and material shortages continue to limit new builds.
  • Despite these countervailing forces, we expect the housing market to remain strong as we head into the end of the year.

Mortgage Bankers’ Association Rates

For the week ending 15th October, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.18% to 3.23%. Points decreased from 0.37 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.20% to 3.17%. Points increased from 0.31 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.22% to 3.26%. Points increased from 0.29 to 0.33 (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, slid by 6.3% in the week ending 15th October. In the previous week, the index had increased by 0.2%.

The Refinance Index tumbled by 7% and was 22% lower than the same week a year ago. In the week prior, the index had fallen by 1.0%.

The refinance share of mortgage activity fell from 63.9% to 63.3% of total applications in the week ending 15th October. In the previous week, the share had declined from 64.5% to 63.9% of total applications.

According to the MBA,

  • Refinance applications fell for a 4th week as rates increased, bringing the refinance index to its lowest level since July-2021.
  • 30-year fixed rates were up 20 basis points over the past month, reaching the highest level since April-2021.
  • Purchase activity declined and was 12% lower than a year ago.
  • Insufficient housing supply and elevated home-price growth continue to limit options for would-be buyers.

For the week ahead

It’s a busier first half of the week on the U.S economic calendar.

Consumer confidence figures for October will influence on Tuesday. Weaker confidence levels will test support for riskier assets.

On Wednesday, core durable goods and durable goods orders will also provide U.S Treasuries with direction.

With the markets looking ahead to the next FOMC policy decision, commodity prices will also be a key driver.

U.S Mortgage Rates Back at 3% for a 2nd Time in 3-Weeks

Mortgage rates moved back through to 3% levels for just the 3rd time since 21st April.

In the week ending 14th October, 30-year fixed rates increased by 6 basis points to 3.05%.

Compared to this time last year, 30-year fixed rates were up by 24 basis points.

30-year fixed rates were still down by 189 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

Early in the week, JOLT’s job openings disappointed following the weaker than expect NFP numbers from the week prior.

Inflationary pressures persisted at the end of the 3rd quarter, however, contributing to the upswing in mortgage rates.

In September, the annual rate of core inflation held steady at 4%, with core consumer prices rising by 0.2% in the month. Consumer prices were also on the up, rising by 0.4% in the month of September.

Freddie Mac Rates

The weekly average rates for new mortgages as of 14th October were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 6 basis points to 3.05% in the week. This time last year, rates had stood at 2.81%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed decreased by 7 basis points 2.30% in the week. Rates were down by 5 basis points from 2.35% a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates rose by 3 basis point to 2.55%. Rates were down by 35 points from 2.90% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage rates rose to their highest level since April, as a result of a buildup in inflationary pressure.
  • Driven by inflationary pressure and tightening monetary policy, Freddie Mac expects rates to continue a modest upswing.
  • Historically speaking, rates are still low, but many potential buyers are staying on the sidelines due to high home price growth.
  • Rising mortgage rates combined with growth home prices make affordability more challenging for potential buyers.

Mortgage Bankers’ Association Rates

For the week ending 8th October, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.14% to 3.18%. Points increased from 0.35 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.12% to 3.20%. Points remained unchanged at 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.20% to 3.22%. Points increased from 0.27 to 0.29 (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, increased by 0.2% in the week ending 8th October. In the previous week, the Index had fallen by 6.9%.

The Refinance Index fell by 1.0% and was 16% lower than the same week one year ago. The index had tumbled by 10.0% in the week prior.

In the week ending 8th October, the refinance share of mortgage activity fell from 64.5% to 63.9% of total applications. The share had declined from 66.4% to 64.5% of total applications in the previous week.

According to the MBA,

  • Mortgage rates reached their highest level since June 2021, but application activity changed little this week.
  • An increase in home purchase applications offset a slight decline in refinances.
  • Over the past month, the 30-year fixed has risen 15 basis points, resulting in an 11% drop in refinance applications.
  • The MBA continues to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive.

For the week ahead

It’s a quiet first half of the week on the U.S economic calendar.

Industrial production figures for September will be the only major stat for the markets to consider.

From the housing sector, building permits and housing starts will also draw interest.

Economic data from China will set the mood at the start of the week, however. 3rd quarter GDP numbers and industrial production figures for September will influence market risk sentiment early in the week.

U.S Mortgage Rates Slip back to sub-3% ahead of the NFP Numbers

Mortgage rates fell back to sub-3% levels after having broken above for just the 2nd time since 21st April.

In the week ending 7th October, 30-year fixed rates slipped by 2 basis points to 2.99%.

Compared to this time last year, 30-year fixed rates were up by 12 basis points.

30-year fixed rates were still down by 195 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busier start to the week on the U.S economic data front. Key stats included factory orders, service sector PMI, and ADP nonfarm employment figures.

The stats were skewed to the positive ahead of the end of the week’s all-important labor market data.

Factory orders increased by 1.2% in August, following a 0.7% rise in July. The market’s preferred ISM Non-Manufacturing PMI was also upbeat, rising from 61.7 to 61.9.

According to the ADP, nonfarm payrolls increased by 568k in September versus a forecasted 428k rise. In August, nonfarm payrolls had risen by 340k according to the ADP…

Freddie Mac Rates

The weekly average rates for new mortgages as of 7th October were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by 2 basis points to 2.99% in the week. This time last year, rates had stood at 2.87%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed decreased by 5 basis points 2.23% in the week. Rates were down by 14 basis points from 2.37% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates rose by 4 basis point to 2.52%. Rates were down by 37 points from 2.89% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates continue to hover at around 3% again this week due to rising economic and financial market uncertainties.
  • Unfortunately, with the expectation that both mortgage rates and home prices will continue to rise, competition remains high and housing affordability is declining.

Mortgage Bankers’ Association Rates

For the week ending 1st October, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.10% to 3.14%. Points increased from 0.34 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.09% to 3.12%. Points increased from 0.25 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.14% to 3.20%. Points decreased from 0.33 to 0.27 (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, slid by 6.9% in the week ending 1st October. In the previous week, the index had fallen by 1.1%.

The Refinance Index tumbled by 10.0% and was 16% lower than the same week one year ago. The Index had declined by 1.0% in the week prior.

In the week ending 1st October, the refinance share of mortgage activity declined from 66.4% to 64.5% of total applications. The share had increased from 66.2% to 66.4% of total applications in the previous week.

According to the MBA,

  • Mortgage applications to refinance dropped to the lowest level in 3-months, while 30-year fixed hit the highest level since July.
  • Higher rates are reducing borrowers’ incentive to refinance.
  • Purchase activity also fell, while the average loan balance failed to drop from $410,000 reached in the week prior.
  • With home-price appreciation and sales prices remaining very elevated, applications for higher balance, conventional loans still dominate the mixed of activity.

For the week ahead

It’s another relatively busy first half of the week on the U.S economic calendar.

Key stats include Jolts’ job openings and, more significantly, September inflation figures.

While nonfarm payrolls disappointed last week, another pickup in inflationary pressure could force the FED’s hand. Expect yields to pick up and push mortgage rates northwards if inflationary accelerates once more.

U.S Mortgage Rates Rise above 3% for the First Time since late June

Mortgage rates jumped above the 3% level for just the 2nd time since 21st April.

In the week ending 30th September, 30-year fixed rates surged by 13 basis points to 3.01%.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April, when rates hit 3.02% on 23rd June.

Compared to this time last year, 30-year fixed rates were up by 13 basis points.

30-year fixed rates were still down by 193 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively quiet start to the week on the U.S economic data front. Key stats included durable and core durable goods orders and consumer confidence figures.

The stats were skewed to the negative, with core durable goods orders falling short of expectations and consumer confidence waning.

In August, core durable goods orders increased by just 0.2% versus a forecasted 0.5% rise. Core durable goods orders had risen by 0.8% in July.

In September, the CB Consumer Confidence Index fell from 115.2 to 109.3. Economists had forecast a more modest decline to 114.5.

From the housing sector, the upswing in houses prices continued to gather pace. The S&P/CS HSI Composite – 20 n.s.a was up 19.9% year-on-year in July. In June, the index had been up 19.1%.

In spite of rising prices, pending home sales jumped by 8.1% in August, reversing a 2.0% decline from July.

Freddie Mac Rates

The weekly average rates for new mortgages as of 30th September were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 13 basis points to 3.01% in the week. This time last year, rates had stood at 2.88%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed also increased by 13 basis points 2.28% in the week. Rates were down by 8 basis points from 2.36% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates rose by a more modest by 5 basis point to 2.48%. Rates were down by 42 points from 2.90% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates were up across all loan types as the 10-year U.S Treasury yield reaches its highest point since June.
  • The jump in the 10-year yield was attributed to FED communication on tapering, the broadening of inflation, and emerging energy supply shortages that compound other labor and materials shortages.
  • Freddie Mac expects rates to continue to rise modestly, which will likely have an impact on home prices, causing them to moderate slightly after increasing over the last year.

Mortgage Bankers’ Association Rates

For the week ending 24th September, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.03% to 3.10%. Points increased from 0.30 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.07% to 3.09%. Points remained unchanged at 0.25 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.11% to 3.14%. Points increased from 0.25 to 0.33 (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, fell by 1.1% in the week ending 24th September. In the previous week, the index had increased by 4.9%.

The Refinance Index declined by 1.0% and was 0.4% higher than the same week one year ago. The index had increased by 7% in the week prior.

In the week ending 24th September, the refinance share of mortgage activity increased from 66.2% to 66.4% of total applications. The share had risen from 64.9% to 66.2% in the previous week.

According to the MBA,

  • Increased optimism about the strength of the economy pushed Treasury yields higher following last week’s FOMC meeting.
  • Mortgage rates rose across all loan times.
  • The increase in rates led to a decrease in both purchase and refinance applications.
  • With home-price appreciation continuing to run hot, increasing more than 19% annually in July, applications for larger loan amounts continue to outpace lower-balance loans.
  • The average application loan size reached $410,000, its highest level since May 2021.

For the week ahead

It’s a relatively busy first half of the week on the U.S economic calendar.

Factory orders, ISM Non-Manufacturing PMI, and ADP Nonfarm Employment change figures will influence yields early in the week.

Following inflation and personal spending figures, upbeat numbers will give more ammunition to the FOMC hawks to force a move. Such a scenario would push yields northwards and mortgage rates higher.

U.S Mortgage Rates See Modest Increase with Labor Market Conditions now Key

Mortgage rates rose modestly, with 30-year fixed rates increasing by just 2 basis points, reversing a 2 basis points fall from the week prior. The weekly increase was just the 5th in 10-weeks.

In the week ending 23rd September, 30-year fixed rates rose by 2 basis points to 2.88%.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were down by 2 basis points.

30-year fixed rates were still down by 206 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively quiet first half of the week, with housing sector data in focus.

In August, building permits jumped by 6%, with new housing starts rising by 3.9%. Following a 6.2% sliding in housing starts in July, a pickup in new inventories would ease inventory shortages.

Existing home sales declined by 2.0%, reversing a 2.2% increase from July.

The numbers had a muted impact on yields and mortgage rates, however, with the FED in focus on Wednesday.

On Wednesday, the FED left monetary policy unchanged and also held back on committing a date to begin tapering. Interest rate projections and the FOMC dot plot chart revealed a divided Committee, with some supporting rate hikes next year.

Freddie Mac Rates

The weekly average rates for new mortgages as of 23rd September were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 2 basis points to 2.88% in the week. This time last year, rates had stood at 2.90%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 3 basis points 2.15% in the week. Rates were down by 25 basis points from 2.40% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates decreased by 8 basis point to 2.43%. Rates were down by 47 points from 2.90% a year ago. The average fee rose from 0.1 point to 0.3 points.

According to Freddie Mac,

  • The slowdown in economic growth around the world has caused a flight to the quality of U.S financial markets.
  • This has led to a rise in foreign investor purchases of U.S Treasuries, causing mortgage rates to remain in place, despite increasing dispersion of inflation across different consumer goods and services.

Mortgage Bankers’ Association Rates

For the week ending 17th September, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points decreased from 0.32 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA rose from 3.04% to 3.07%. Points fell from 0.27 to 0.25 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.13% to 3.11%. Points increased from 0.21 to 0.25 (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, increased by 4.9% in the week ending 17th September. In the previous week, the index had increased by 0.3%.

The Refinance Index increased by 7% and was 5% lower than the same week one year ago. The index had declined by 3% in the week prior.

In the week ending 17th September, the refinance share of mortgage activity increased from 64.9% to 66.2%. The share had fallen from 66.8% to 64.9% in the previous week.

According to the MBA,

  • There was a resurgence in mortgage applications after Labor Day, with overall activity at its highest level in over a month.
  • Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory.
  • The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale.
  • Despite this week’s increase, purchase applications were still 13% lower than the same week a year ago.

For the week ahead

It’s another quiet week ahead on the economic data front, though we can expect the numbers to influence yields.

Durable and core durable goods orders are out along with consumer confidence figures.

In the week, house price and pending home sales figures are also due out but should have a muted impact on mortgage rates.

Following last week’s interest rate projections, expect FOMC member chatter to also draw plenty of interest in the week.

U.S Mortgage Rates Fall Ahead of the FOMC Meet and Projections

Mortgage rates were relatively flat once more, with 30-year fixed rates falling by just 2 basis points. After a 1 basis point rise in the week prior, rates fell the 6th time in 11-weeks.

In the week ending 16th September, 30-year fixed rates fell by 2 basis points to 2.86%.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were down by just 1 basis point.

30-year fixed rates were still down by 208 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week, with inflation figures for August in focus on Tuesday.

Softer inflation figures pegged back mortgage rates in the week.

In August, the U.S core annual rate of inflation slipped from 4.3% to 4.0%. While softer, the continued spike in inflation left a FED tapering on the table for this year.

On Wednesday, industrial production and NY Empire State Manufacturing data failed to drive yields in spite of upbeat numbers.

The NY Empire State Manufacturing Index climbed from 18.3 to 34.3 in September. Industrial production rose by 0.4% in August, following a 0.8% increase in July.

While the stats from the U.S were upbeat, economic data from China raised yet more red flags over the Chinese economic recovery.

In August, industrial production increased by 5.3%, year-on-year, which was down from 6.4% in July. Fixed asset investments also disappointed, rising by 8.9% versus 10.3% in July. Both fell short of forecasts.

Freddie Mac Rates

The weekly average rates for new mortgages as of 16th September were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 2 basis points to 2.86% in the week. This time last year, rates had stood at 2.87%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed fell by 7 basis points 2.12% in the week. Rates were down by 23 basis points from 2.35% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates increased by 9 basis point to 2.51%. Rates were down by 45 points from 2.96% a year ago. The average fee fell from 0.3 points to 0.1 point.

According to Freddie Mac,

  • Mortgage rates continued to remain flat, reflecting the markets’ view that prospects for the economy have dimmed as a result of the latest spike in new COVID-19 cases.
  • Fundamental changes to the economy are occurring, however, which will likely lead to significant investment and new post-pandemic economic models that will spur economic growth.
  • Such changes include increased migration, a continuation of remote work, increased use of automation, and focus on a more energy efficient and resilience economy.

Mortgage Bankers’ Association Rates

For the week ending 10th September, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points decreased from 0.33 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.07% to 3.04%. Points fell from 0.30 to 0.27 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.14% to 3.13%. Points declined from 0.30 to 0.21 (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, increased by 0.3% in the week ending 10th September. In the previous week, the index had declined by 1.9%

The Refinance Index declined by 3% and was 3% lower than the same week a year ago. The index had also fallen by 3% in the week prior.

In the week ending 10th September, the refinance share of mortgage activity fell from 66.8% to 64.9%. The share had remained unchanged at 66.8% in the week prior.

According to the MBA,

  • Purchase applications, after adjusting for the impact of Labor Day, increased over 7% to their highest level since Apr-21.
  • Compared with Sept-2020, which was in the middle of a significant upswing in home purchases, applications were down 11%.
  • The average loan size for a purchase application rose to $396,800, with a competitive purchase market pushing sales prices upwards.
  • By contrast, refinance applications fell to their slowest pace since early July.

For the week ahead

It’s a quieter week ahead on the economic data front. Economic data is limited to housing sector data that should have a muted impact on yields.

The market focus will be on the FOMC monetary policy decision and projections due late on Wednesday.

A hawkish FED would push yields northwards that should support a pickup in mortgage rates in the coming weeks.

U.S Mortgage Rates Hold Steady as Economic Uncertainty Lingers

Mortgage rates were relatively flat, with 30-year fixed rates rising by just 1 basis point. After holding steady in the week prior, rates rose for just the 4th time in 11-weeks.

In the week ending 9th September, 30-year fixed rates rose by 1 basis point to 2.88%.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were up by 2 basis points.

30-year fixed rates were still down by 206 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a quieter first half of the week, with the U.S markets closed for Labor Day on Monday.

Key stats included JOLT’s job openings from the U.S, which were upbeat following the disappointing NFP numbers from the week prior.

With stats from the U.S on the lighter side, the weaker than expected nonfarm payrolls from the Friday prior pegged rates back in the week, however.

Freddie Mac Rates

The weekly average rates for new mortgages as of 9th September were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 1 basis point to 2.88% in the week. This time last year, rates had stood at 2.86%. The average fee remained rose from 0.6 to 0.7 points.
  • 15-year fixed increased by 1 basis point 2.19% in the week. Rates were down by 18 basis points from 2.47% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates fell by 1 basis point to 2.42%. Rates were down by 69 points from 3.11% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • While the economy continues to grow, it has lost momentum over the last 2-months due to the current wave of the Delta variant.
  • Weaker employment, lower spending, and declining consumer confidence has resulted, pegging back rates.
  • Rates have held steady despite increases in inflation caused by supply and demand imbalances.
  • The net result for housing is that these low and stable rates allow customers more time to find the homes they are looking to purchase.

Mortgage Bankers’ Association Rates

For the week ending 3rd September, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points decreased from 0.34 to 0.33 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.09% to 3.07%. Points rose from 0.25 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.13% to 3.14%. Points rose from 0.26 to 0.30 (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, declined by 1.9% in the week ending 3rd September. In the previous week, the index had decreased by 2.4%.

The Refinance Index decreased by 3% and was 4% lower than the same week a year ago. The Index had fallen by 4% in the previous week.

In the week ending 3rd September, the refinance share of mortgage activity remained unchanged at 66.8%. The share had fallen from 67.3% to 66.8% in the week prior.

According to the MBA,

  • Mortgage application volumes fell last week to its lowest level since mid-July, as mortgage rates remained above 3% for several weeks.
  • Refinance volume has been moderating, while purchase volume continues to be lower than expected given the lack of homes on the market.
  • Economic data has seen mixed signals, with slower job growth but a further drop in the unemployment rate in August.
  • We expect that further improvements will lead to a tapering of the FED MBS purchases by the end of the year. This should put some upward pressure on mortgage rates.

For the week ahead

It’s a busier week ahead on the economic data front. U.S inflation figures on Tuesday and industrial production figures on Wednesday will influence.

Another pickup in inflationary pressure would likely bring forward the FED’s timelines on tapering. While employment growth has slowed, a continued pickup in inflationary pressure would need to be curbed. Expect, therefore, further inflationary pressure to nudge mortgage rates northwards.

U.S Mortgage Rates Held Steady ahead of Nonfarm Payrolls

Mortgage rates were unchanged, with 30-year fixed rates holding steady after having risen for just the 3rd time in 9-weeks in the week prior.

In the week ending 2nd September, 30-year fixed rates remained unchanged at 2.87%. Mortgage rates had risen by 1 basis point in the week prior.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were down by 6 basis points.

30-year fixed rates were still down by 207 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar.

Consumer confidence, manufacturing PMIs, and ADP nonfarm employment change were in focus.

The stats were skewed to the negative, with consumer confidence taking a hit in August.

Manufacturing sector activity picked up slightly in August, however, with the ISM Manufacturing PMI up from 59.5 to 59.9.

While the ISM figure was market positive, labor market data disappointed ahead of the all-important NFP numbers on Friday.

According to the ADP, nonfarm employment increased by 374k in August, falling short of a forecasted 613k jump.

From China, economic data was also skewed to the negative, raising red flags over the pace of the economic recovery.

According to the market’s preferred Markit survey, China’s Caixin Manufacturing PMI fell from 50.3 to 49.2.

Freddie Mac Rates

The weekly average rates for new mortgages as of 2nd September were quoted by Freddie Mac to be:

  • 30-year fixed rates held steady 2.87% in the week. This time last year, rates had stood at 2.93%. The average fee remained unchanged at 0.6 points.
  • 15-year fixed increased by 1 basis point 2.18% in the week. Rates were down by 24 basis points from 2.42% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates rose by 1 basis point to 2.43%. Rates were down by 50 points from 2.93% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Economic growth and the acceleration in inflation have moderated in the last month, giving the markets comfort. As a result, mortgage rates have also stabilized.
  • Heading into the fall, home purchase demand is stable and home sales remain firm and above pre-pandemic levels.
  • Inventory of unsold homes remain tight but improving modestly.
  • Current sector dynamics will allow for home price pressure to ease over the remainder of the year.

Mortgage Bankers’ Association Rates

For the week ending 27th August, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points increased from 0.29 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.10% to 3.09%. Points declined from 0.29 to 0.25 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances remained unchanged at 3.13%. Points remained unchanged at 0.26 (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, decreased by 2.4% in the week ending 27th August. In the previous week, the index had increased by 1.6%.

The Refinance Index decreased by 4% and was 2% higher than the same week a year ago. The Index had increased by 10% in the previous week.

In the week ending 27th August, the refinance share of mortgage activity fell from 67.3% to 66.8%. The share had remained unchanged at 67.3% in the week prior.

According to the MBA,

  • There was little change in mortgage rates last week.
  • Despite low rates, refinance applications declined, as some borrowers looked for rates to drop further.
  • Recent uncertainty around the economy and the pandemic have pegged rates back.
  • Even with a slight increase, purchase activity hit its highest level since early July.
  • Home purchase activity continues to be dominated by higher price tiers of the market.
  • In the week, the purchase average loan size hit $396,500, the highest average in 5-weeks.

For the week ahead

It’s a quieter week ahead on the economic data front, with the U.S markets closed for Labor Day on Monday.

Economic data in the 1st half of the week is limited to JOLT’s job openings. Following last week’s nonfarm payroll figures and a lack of stats, yields could peg mortgage rates back in the week.

U.S Mortgage Rates Held Steady Last Week, with COVID-19 Delivering Uncertainty

Mortgage rates avoided another weekly decline, with 30-year fixed rates on the rise for just the 3rd time in 9-weeks.

In the week ending 26th August, 30-year fixed rates rose by 1 basis point to 2.87%. Mortgage rates had slipped by 1 basis point in the week prior.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were down by 4 basis points.

30-year fixed rates were still down by 207 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar.

Prelim private sector PMIs for August and core durable goods orders for July were in focus.

Private sector PMI numbers disappointed mid-way through the 3rd quarter. The all-important services PMI fell from 59.9 to 55.2. Economists had forecast a more modest decline to 59.5. Manufacturing sector activity fared somewhat better, with the PMI declining from 63.4 to 61.2.

Core durable goods orders eased some pain, however, rising by 0.7% in July. In June, core durable goods orders had risen by 0.6%.

While the stats were skewed to the negative, the markets were holding out for FED Chair Powell’s speech on Friday. Uncertainty over FED monetary policy following the impressive NFP numbers for July kept the markets apprehensive through the week.

Freddie Mac Rates

The weekly average rates for new mortgages as of 26th August were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 1 basis point to 2.87% in the week. This time last year, rates had stood at 2.91%. The average fee fell from 0.7 points to 0.6 points.
  • 15-year fixed increased by 1 basis point 2.17% in the week. Rates were down by 29 basis points from 2.46% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates declined by 1 basis point to 2.42%. Rates were down by 49 points from 2.91% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • The tug-of-war between the economic recovery and rising COVID-19 cases left mortgage rates on a sideways move.
  • Overall, rates continue to be low, with a window of opportunity for those who did not refinance under 3%.
  • From a homebuyer perspective, purchase application demand is improving, but the major obstacle to higher home sales remains low inventory for consumers to purchase.

Mortgage Bankers’ Association Rates

For the week ending 20th August, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.06% to 3.03. Points decreased from 0.34 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.15% to 3.10%. Points declined from 0.31 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.19% to 3.13%. Points remained unchanged at 0.26 (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, increased by 1.6% in the week ending 20th August. In the week prior, the index had decreased 3.9%.

The Refinance Index increased by 10% and was 3% higher than the same week a year ago. The index had decreased by 5% in the previous week.

In the week ending 20th August, the refinance share of mortgage activity remained unchanged at 67.3%. The share had decreased from 68.0% to 67.3% in the week prior.

According to the MBA,

  • Treasury yields fell last week as investors continue to anxiously monitor if the rise in COVID-19 cases start to dampen economic activity.
  • Mortgage rates fell as a result, with the 30-year fixed falling for the first time in 3-weeks.
  • Lower rates led to an increase in refinance applications.
  • The purchase index was at its highest level since early July, despite still continuing to lag 2020’s pace.
  • There was also some easing in average loan sizes, which is potentially a sign that more first-time buyers are being helped by an increase in inventory.

For the week ahead

Consumer confidence, ADP nonfarm employment change, and ISM Manufacturing PMI figures will be in focus.

While the manufacturing numbers will influence, expect consumer confidence and the ADP numbers to have a greater impact on yields.

From elsewhere, private sector PMI numbers from China will also influence market risk sentiment in the week.

Away from the economic calendar, COVID-19 numbers will continue to draw interest.

U.S Mortgage Rates Hold Steady Ahead of the Jackson Hole Symposium

Mortgage rates slipped back after having been on the rise for just the 2nd time in 7-weeks in the previous week.

In the week ending 19th August, 30-year fixed rates fell by 1 basis point to 2.86%. Mortgage rates had jumped by 10 basis points in the week prior.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were down by 13 basis points.

30-year fixed rates were still down by 208 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the economic data front. Key stats from the U.S included manufacturing numbers for NY State, industrial production, and retail sales figures.

The stats were skewed to the negative, with retail sales falling by 1.0% in July versus a forecasted 0.3% decline. In June, retail sales had risen by 0.7%.

In August, the NY Empire State Manufacturing Index slid from 43.0 to 18.3% versus a forecasted fall to 29.0.

On the monetary policy front, FOMC meeting minutes revealed increased debate over a tapering to the asset purchasing program. Following impressive NFP payrolls, FOMC member chatter in the week weighed on riskier assets, with members talking of a need make a move.

From elsewhere, economic data from China added to concerns over the economic recovery at the start of the week.

Fixed asset investments rose by 6.4% in July, year-on-year, compared with 8.3% in June. Retail sales increased by 8.5% compared with 12.6% in June.

Freddie Mac Rates

The weekly average rates for new mortgages as of 19th August were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by 1 basis points to 2.86% in the week. This time last year, rates had stood at 2.99%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed increased by 1 basis point 2.16% in the week. Rates were down by 38 basis points from 2.54% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates declined by 1 basis point to 2.43%. Rates were down by 48 points from 2.91% a year ago. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • Mortgage rates stayed relatively flat in the week. Housing is in a similar phase of the economic cycle as many other consumer goods.
  • While there is strong latent demand, low supply has caused prices to rise as shortages restrict the mount of sales activity that would otherwise occur.

Mortgage Bankers’ Association Rates

For the week ending 13th August, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 2.99% to 3.06. Points increased from 0.30 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.06% to 3.15%. Points rose from 0.27 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.15% to 3.19%. Points decreased from 0.29 to 0.26 (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, decreased 3.9% in the week ending 13th August. In the week prior, the Index had increased by 2.8%.

The Refinance Index decreased by 5% and was 8% lower than one week earlier. The Index had increased by 3% in the previous week.

In the week ending 13th August, the refinance share of mortgage activity decreased from 68.0% to 67.3%. The share had increased from 67.6% to 68.0% in the week prior.

According to the MBA,

  • Mortgage rates were at their highest levels in around a month, with the 30-year fixed rate rising above 3.0%.
  • Rates followed an overall increase in Treasury yields last week, which started high from the strong July jobs report before slowing in response to weaker consumer sentiment and concerns over COVID-19.
  • Purchase applications saw mixed results and, despite a second-straight weekly decrease, average loan sizes remain close to record highs.
  • This is a continuing sign that sales prices are still elevated, driven by stiff competition leading to accelerating home-price growth.

For the week ahead

Prelim August private sector PMIs on Monday and core durable goods orders on Tuesday will be in focus.

Expect the services PMI and core durable goods orders to be key from the economic calendar.

On the monetary policy front, FOMC member chatter ahead of the FED’s Jackson Hole Symposium will also have a material impact on yields.

U.S Mortgage Rates Rise but Fall Short of 3%

Mortgage rates bounced back, with rates rising for the 2nd time in 7-weeks.

In the week ending 12th August, 30-year fixed rates jumped by 10 basis points to 2.87%. Mortgage rates had fallen by 3 basis points in the week prior.

30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.

Compared to this time last year, 30-year fixed rates were down by 9 basis points.

30-year fixed rates were still down by 207 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar.

JOLT’s job openings, 2nd quarter unit labor costs and nonfarm productivity, and July inflation figures were in focus.

A marked pickup in job openings was positive for yields at the start of the week.

The rest of the stats were skewed to the negative, however.

Inflationary pressures eased in July, with the core annual rate of inflation softening from 4.5% to 4.3%.

Unit labor costs rose by a modest 1.0% in the 2nd quarter, with nonfarm productivity increasing by 2.3%. In the 1st quarter, unit labor costs had risen by 2.8% and NFP productivity up by 4.3%.

While the stats were skewed to the negative, the previous Friday’s impressive NFP numbers for July drove mortgage rates northwards.

Freddie Mac Rates

The weekly average rates for new mortgages as of 12th August were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 10 basis points to 2.87% in the week. This time last year, rates had stood at 2.96%. The average fee rose from 0.6 points to 0.7 points.
  • 15-year fixed increased by 5 basis points 2.15% in the week. Rates were down by 31 basis points from 2.46% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates rose by 4 basis point to 2.44%. Rates were down by 46 points from 2.90% a year ago. The average fee fell from 0.4 points to 0.3 points.

According to Freddie Mac,

  • Nonfarm payroll and wage growth numbers from the previous Friday sent mortgage rates northwards in the week.
  • Despite the rise, rates remain very low, particularly given that economic growth is strong and will continue into next year.

Mortgage Bankers’ Association Rates

For the week ending 6th August, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 2.97% to 2.99%. Points decreased from 0.33 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.08% to 3.06%. Points fell from 0.29 to 0.27 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.12% to 3.15%. Points decreased from 0.30 to 0.29 (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, increased by 2.8% in the week ending 6th August. In the week prior, the index had fallen by 1.7%.

The Refinance Index increased by 3% and was 8% lower than the same week a year ago. The Index had fallen by 2% in the previous week.

In the week ending 6th August, the refinance share of mortgage activity increased from 67.6% to 68.0%. The share had increased from 67.5% to 67.6 in the week prior.

According to the MBA,

  • Mortgage applications rebounded, including an increase in purchase applications, for the first time in almost a month.
  • While on the rise, driven by an end-of-week increase in 10-year Treasury yields, rates remained below 3%. A positive jobs report for July sent yields northwards.
  • Homeowners continue to respond to lower rates, with refinance activity climbing to its highest level since Feb-2021.

For the week ahead

NY Empire State Manufacturing numbers for August and retail sales figures for July will be in focus.

Expect the retail sales figures to be key as the markets look for other factors that could force the FED to make a move.

Mid-week, housing sector data for July will also draw interest but will unlikely impact Treasury yields. Housing starts and building permits are due out.

On the monetary policy front, the FOMC meeting minutes will influence in the week. Expect any hawkish chatter to send mortgage rates higher.