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.

U.S Mortgage Rates Fall for the First Time in 8-Weeks

In the week ending April 28, 2022, mortgage rates fell for the first time in eight weeks.

30-year fixed rates slipped by 1 basis point to 5.10%. 30-year fixed rates rose by 11 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 212 basis points.

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

Economic Data from the Week

Core durable goods orders and consumer sentiment drew interest on Tuesday. The stats were market positive, with core durable goods orders rising by 1.1% in March.

Consumer sentiment held steady in April, which was also market positive. The CB Consumer Confidence Index slipped from 107.6 to 107.3.

The stats had a muted impact on mortgage rates, however, as market jitters over the economic outlook tested support for riskier assets.

Freddie Mac Rates

The weekly average rates for new mortgages, as of April-28, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates fell by 1 basis point to 5.10% in the week. This time last year, rates had stood at 2.98%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates rose by 2 basis points to 4.40% in the week. Rates were up by 209 basis points from 2.31% a year ago. The average fee increased from 0.8 points to 0.9 points.
  • 5-year fixed rates increased by 3 basis points to 3.78%. Rates were up by 114 basis points from 2.64% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Home price growth and a surge in mortgage rates have impacted purchase demand.
  • Buyers are managing the current mortgage rate environment by moving to adjustable mortgage rates, relocating from expensive cities, and moving to more affordable suburbs.
  • Weaker demand is likely to soften home price growth to a more sustainable pace.

Mortgage Bankers’ Association Rates

For the week ending April 22, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 5.20% to 5.37%. Points increased from 0.66 to 0.67 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 5.11% to 5.29%. Points fell from 0.90 to 0.88 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.76% to 4.86%. Points rose from 0.46 to 0.47 (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 8.3% in the week ending April 22. The Index declined by 5% in the previous week.

The Refinance Index fell by 9% and was 71% lower than the same week one year ago. In the week prior, the Index fell by 8%.

The refinance share of mortgage activity decreased from 35.7% to 35.0% of total applications. In the previous week, the share fell from 37.1% to 35.7%.

According to the MBA,

  • Applications continued to decline as mortgage rates hit their highest level since 2009.
  • Overall application activity fell to the lowest level since 2018.
  • The latest fall in purchase applications is a sign of possible home sales weakness in the months ahead.

For the week ahead

From the US, it is a big week ahead. On the economic data front, ISM survey PMIs will influence this Monday and Wednesday, with Wednesday’s ISM Non-Manufacturing PMI the main driver.

The US labor market will also be in focus, with the ADP nonfarm employment change figures and official nonfarm numbers due out on Wednesday and Friday.

The main event of the week, however, is the FED’s monetary policy decision. A larger-than-expected rate hike would deliver another spike in mortgage rates.

News updates on the war in Ukraine will also need monitoring throughout the week.

U.S Mortgage Rates Rise for a Seventh Consecutive Week

In the week ending April 21, 2022, mortgage rates rose for a seventh consecutive week.

30-year fixed rates rose by 11 basis points to 5.11%. 30-year fixed rates jumped by 28 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 214 basis points.

30-year fixed rates were up by 17 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

There were no material stats from the US for the markets to consider in the first half of the week. The lack of stats left mortgage rates in the hands of market sentiment towards inflation and Fed monetary policy.

Continued concerns over the impact of supply chain disruption on inflation drove Treasury yields higher ahead of a scheduled Fed Chair Powell speech on Thursday.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 11 basis points to 5.11% in the week. This time last year, rates had stood at 2.97%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates surged by 21 basis points to 4.38% in the week. Rates were up by 209 basis points from 2.29% a year ago. The average fee fell from 0.9 points to 0.8 points.
  • 5-year fixed rates increased by 6 basis points to 3.75%. Rates were up by 92 basis points from 2.83% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates increased for a seventh consecutive week, driven by the upward trend in Treasury yields.
  • The surge in rates has impacted demand at the traditionally busiest time of the homebuying season.
  • Buyers who remain interested in purchasing a home may find more moderate competition.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances rose from 5.13% to 5.20%. Points increased from 0.63 to 0.66 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.95% to 5.11%. Points rose from 0.75 to 0.90 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.68% to 4.76%. Points rose from 0.37 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, decreased by 5% in the week ending April-15. The Index declined by 1% in the previous week.

The Refinance Index fell by 8% and was 68% lower than the same week one year ago. In the week prior, the Index fell by 5%.

The refinance share of mortgage activity decreased from 37.1% to 35.7% of total applications. In the previous week, the share fell from 40.6% to 37.1%.

According to the MBA,

  • Concerns about rapid inflation and tighter US monetary policy continued to push Treasury yields higher.
  • Mortgage rates hit their highest level in over a decade.
  • 30-year fixed rates have jumped 70 basis points over the past month and sit two full percentage points higher than a year ago.
  • The upswing in rates has pushed out borrowers, causing the refinance Index to fall for a sixth consecutive week.
  • Amidst affordability challenges and low inventory in the housing market, buyers are pulling back or delaying home purchases.

For the week ahead

From the US, core durable goods and consumer confidence figures will draw attention on Tuesday. Expect consumer confidence to have more influence on yields.

While the stats will provide direction, the markets will also track crude oil prices, news updates from China on lockdown measures, and the war in Ukraine.

Sentiment towards supply chain disruption remains a key consideration for inflation.

U.S Mortgage Rates Hit Five Percent Following Another Spike in Inflation

In the week ending April 14, 2022, mortgage rates rose for a sixth consecutive week.

30-year fixed rates jumped by 28 basis points to 5.00%. 30-year fixed rates rose by 5 basis points in the week prior. It was the first time that mortgage rates stood at 5% since 2010.

Year-on-year, 30-year fixed rates were up by 196 basis points.

30-year fixed rates were up by 6 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

In the first half of the week, inflation was back in the spotlight. With a further disruption to supply chains, the markets expect the upward trend in wholesale and consumer prices to continue.

In March, the annual rate of inflation accelerated from 7.9% to 8.5%, a new four-decade high. The pickup in inflationary pressure drove Treasury yields northwards as the markets bet on a more aggressive Fed rate path for the year.

Wholesale prices were also on the rise. In March, the producer price index increased by 1.4%, following a 0.9% gain in the previous month.

Freddie Mac Rates

The weekly average rates for new mortgages, as of April-14, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 28 basis points to 5.00% in the week. This time last year, rates had stood at 3.14%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates surged by 26 basis points to 4.17% in the week. Rates were up by 182 basis points from 2.35% a year ago. The average fee increased from 0.8 points to 0.9 points.
  • 5-year fixed rates increased by 13 basis points to 3.69%. Rates were up by 89 basis points from 2.80% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates averaged five percent for the first time in over a decade.
  • The combination of rising mortgage rates, elevated home prices, and tight inventory is making the pursuit of homeownership the most expensive in a generation.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.90% to 5.13%. Points increased from 0.53 to 0.63 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.90% to 4.95%. Points rose from 0.68 to 0.75 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.51% to 4.68%. Points rose from 0.34 to 0.37 (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% in the week ending April-08. The Index declined by 6.3% in the previous week.

The Refinance Index fell by 5% and was 62% lower than the same week one year ago. In the week prior, the Index slid by 10%.

The refinance share of mortgage activity decreased from 40.6% to 37.1% of total applications. In the previous week, the share fell from 40.6% to 38.8%.

According to the MBA,

  • 30-year fixed mortgage rates rose to 5.13%, the highest since November 2018.
  • Refinance activity took a hit, falling to the slowest weekly pace since 2019.
  • MBA’s April 2022 forecast now sees mortgage originations down 35.5% from 2021, as a result of a projected 64% slide in refinance originations.
  • The jump in mortgage rates will adversely impact the housing market and housing demand for the remainder of the year.

For the week ahead

There are no stats due out of the U.S to provide U.S Treasury yields with direction early in the week. A lack of stats will leave U.S Treasuries in the hands of FOMC member chatter, economic data from China, and news updates from Ukraine.

On Monday, Q1 GDP numbers from China will set the tone.

U.S Mortgage Rates Rise for a Fifth Consecutive Week on Fed Policy

In the week ending April 7, 2022, mortgage rates rose for a fifth consecutive week.

30-year fixed rates rose by 5 basis points to 4.72%. 30-year fixed rates surged by 25 basis points in the week prior. It was the highest mortgage rate since 4.75% on December 5, 2018.

Year-on-year, 30-year fixed rates were up by 159 basis points.

30-year fixed rates were down by 22 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

In the first half of the week, the focus was on factory orders and service sector PMIs.

The stats were mixed. Factory orders fell by 0.5% in February, partially reversing a 1.5% rise from January, while service sector activity improved.

In March, the market’s preferred ISM Non-Manufacturing PMI increased from 56.5 to 58.3.

With the stats dollar positive, the FOMC meeting minutes were also dollar positive mid-week. More hawkish than anticipated minutes drove U.S Treasury yields northwards. The minutes revealed plans to begin cutting the FED balance sheet by $95bn per month amidst a rising interest rate environment to curb inflation.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 5 basis points to 4.72% in the week. This time last year, rates had stood at 3.13%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates rose by 8 basis points to 3.91% in the week. Rates were up by 149 basis points from 2.42% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates increased by 6 basis points to 3.56%. Rates were up by 64 basis points from 2.92% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates have seen the fastest 3-month rise since May 1994.
  • Increased mortgage rates have hit purchase demand.
  • Monthly payments for those looking to buy a home have risen by at least 20% from a year ago.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.80% to 4.90%. Points decreased from 0.56 to 0.53 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.66% to 4.90%. Points fell from 0.71 to 0.68 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.40% to 4.51%. Points declined from 0.44 to 0.34 (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 6.3% in the week ending April-01. The Index fell by 6.8% in the previous week.

The Refinance Index slid by 10% and was 62% lower than the same week one year ago. In the week prior, the Index tumbled by 15%.

The refinance share of mortgage activity decreased from 40.6% to 38.8% of total applications. In the previous week, the share fell from 44.8% to 40.6%.

According to the MBA,

  • Mortgage application volume continues to fall due to the upswing in mortgage rates, driven by sentiment towards monetary policy.
  • As higher rates reduce the incentive to refinance, application volume fell to its lowest since Spring 2019.
  • Strong labor market conditions and wage growth have supported housing demand despite surging mortgage rates and house price appreciation.
  • Inventories continue to peg back purchase activity, however.

For the week ahead

The week kicks off with inflation figures due out on Tuesday. Expect plenty of market sensitivity to the numbers following last week’s hawkish FOMC meeting minutes.

On Wednesday, wholesale inflation figures will also draw interest ahead.

Away from the economic data, Russia and Ukraine will remain an area of focus for the global financial markets.

U.S Mortgage Rates Surge for a Third Consecutive Week

In the week ending March 31, 2022, mortgage rates rose sharply for a third consecutive week.

30-year fixed rates jumped by 25 basis points to 4.67%. 30-year fixed rates surged by 26 basis points in the week prior. It was the highest mortgage rate since December 2018.

Year-on-year, 30-year fixed rates were up by 149 basis points. 30-year fixed rates were down by 24 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. Consumer confidence, private sector PMIs, and ADP nonfarm payroll figures were in focus.

The stats were skewed to the positive, supporting Fed Chair Powell’s willingness to lift rates at a more aggressive pace.

With inflation already at 40-year highs, China’s latest lockdown measures and Russia’s invasion of Ukraine suggest inflation will go even higher. Such an eventuality would force the Fed to more aggressively rein in inflation, which would translate into higher mortgage rates.

Freddie Mac Rates

The weekly average rates for new mortgages, as of March-31, 2022, were quoted by Freddie Mac to be:

  • 30-year fixed rates surged by 25 basis points to 4.67% in the week. This time last year, rates had stood at 3.18%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates jumped by 20 basis points to 3.83% in the week. Rates were up by 138 basis points from 2.45% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates rose by 14 basis points to 3.50%. Rates were up by 66 basis points from 2.84% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates rose once more amidst the current inflation environment.
  • Ongoing supply chain disruptions and demand for goods are likely to push inflation higher yet.
  • Purchase demand has softened but outpaces expectations.
  • First-time homebuyer demand and those waiting for rates to fall to cyclical lows continue to support the housing market.

Mortgage Bankers’ Association Rates

For the week ending March 25, 2022, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.50% to 4.80%. Points decreased from 0.59 to 0.56 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.40% to 4.66%. Points fell from 0.73 to 0.71 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.11% to 4.40%. Points declined from 0.51 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, fell by 6.8% in the week ending March-25. The Index slid by 8.1% in the previous week.

The Refinance Index tumbled by 15% and was 60% lower than the same week one year ago. In the week prior, the Index slid by 14%.

The refinance share of mortgage activity fell from 44.8% to 40.6% of total applications. In the previous week, the share declined from 48.4% to 44.8%.

According to the MBA,

  • Mortgage rates hit their highest level in more than three years, driven by sentiment towards Fed monetary policy.
  • Refinance applications continued to fall, with application volume down 60% from last year’s levels.
  • Purchase application volumes were largely unchanged despite the jump in mortgage rates.

For the week ahead

In the first half of the week, the market’s preferred ISM Non-Manufacturing PMI for March will be the key stat.

Other stats include U.S factory orders, trade data, and Markit survey-based service and composite PMIs. We don’t expect these numbers to have a material impact, however.

Upward pressure will come from last week’s nonfarm payrolls that were a green light for the Fed to take a more aggressive path to curb inflation.

On the monetary policy front, the FOMC meeting minutes on Wednesday will also influence.

Away from the economic data, Russia and Ukraine will remain an area of focus for the global financial markets.

U.S Mortgage Rates Surge, with Inflation and the FED the Key Drivers

In the week ending 24th March, mortgage rates rose sharply for a second consecutive week.

30-year fixed rates jumped by 26 basis points to 4.42%. In the week prior, 30-year fixed rates surged by 31 basis points. 30-year fixed rates were at their highest since 4.35% on February-27, 2019.

Year-on-year, 30-year fixed rates were up by 125 basis points.

30-year fixed rates were still down by 52 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 major stats to provide U.S Treasuries and mortgage rates with direction. Rising crude oil prices and concerns over further supply chain disruption kept inflation in focus.

On the monetary policy front, hawkish Fed Chair chatter supported the upward trend in mortgage rates. Fed Chair Powell talked of a willingness to lift rates more aggressively to curb inflation.

Freddie Mac Rates

The weekly average rates for new mortgages, as of 24th March, were quoted by Freddie Mac to be:

  • 30-year fixed rates surged by 26 basis points to 4.42% in the week. This time last year, rates had stood at 4.17%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates jumped by 24 basis points to 3.63% in the week. Rates were up by 118 basis points from 2.45% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates rose by 17 basis points to 3.36%. Rates were up by 52 basis points from 2.84% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Rising inflation, escalating geopolitical uncertainty, and the Fed drove rates higher, reducing consumer purchasing power.
  • The jump in mortgage rates, coupled with house price appreciation, is increasing monthly mortgage payments and affecting homebuyers’ ability to keep up with the market.

Mortgage Bankers’ Association Rates

For the week ending 18th March, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.27% to 4.50%. Points increased from 0.54 to 0.59 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.23% to 4.40%. Points rose from 0.62 to 0.73 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.02% to 4.11%. Points rose from 0.37 to 0.51 (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, slid by 8.1% in the week ending March-18. The Index fell by 1.2% in the previous week.

The Refinance Index tumbled by 14% and was 54% lower than the same week a year ago. In the week prior, the Index fell by 3%.

The refinance share of mortgage activity declined from 48.4% to 44.8%. In the previous week, the share decreased from 49.5% to 48.4%.

According to the MBA,

  • 30-year conforming mortgage rates saw the largest weekly increase since March 2020.
  • The upside came in response to markets pricing in faster rate hikes and expectations of fewer MBS purchases from the FED.
  • Refinance volume has dropped, with mortgage rates now at 4.5%.
  • The MBA now forecasts mortgage rates to trend higher through the course of 2022.
  • Purchase application volume fell modestly, while first time buyers are increasingly challenged by rising house prices and higher mortgage rates.

For the week ahead

Early in the week, consumer confidence and ADP nonfarm payroll figures will draw interest. While the stats will draw attention, crude oil prices, geopolitics, and FOMC member chatter will remain key drivers.

A further uptrend in crude oil prices would push consumer prices even higher, which would force the FED into a more aggressive interest rate path.

U.S Mortgage Rates Hit 4% in Response to FED Monetary Policy and Projections

In the week ending 17th March, mortgage rates surged to 4% levels for the first time since 2019.

30-year fixed rates surged by 31 basis points to 4.16%. 30-year fixed rates had risen by 9 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 107 basis points.

30-year fixed rates were still down by 78 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

In the first half of the week, wholesale inflation and retail sales were the key stats. The numbers were dollar negative.

The core producer price index increased by 0.2% in February, softer than a 1.0% rise in January.

More significantly, retail sales were also disappointing. Core retail sales rose by just 0.2%, with retail sales up 0.3% in February. Both had seen marked increases in the month prior.

While the stats disappointed, a FED rate hike and hawkish interest rate projections drove mortgage rates back to 4%. Hopes of a ceasefire in Ukraine and Beijing economic stimulus supported demand for riskier assets, delivering further upside for U.S Treasury yields.

Freddie Mac Rates

The weekly average rates for new mortgages, as of 17th March, were quoted by Freddie Mac to be:

  • 30-year fixed rates surged by 31 basis points to 4.16% in the week. This time last year, rates had stood at 3.09%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates jumped by 30 basis points to 3.39% in the week. Rates were up by 99 basis points from 2.40% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates rose by 22 basis points to 3.19%. Rates were up by 40 basis points from 2.79% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage rates exceeded 4% for the first time since May 2019.
  • The FED raising short-term rates and projecting further increases point to further increases in mortgage rates.
  • While demand for homes has moderated, low inventories keep the housing sector competitive, suggesting further increases in house prices.

Mortgage Bankers’ Association Rates

For the week ending 11th March, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.09% to 4.27%. Points increased from 0.44 to 0.54 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.12% to 4.23%. Points fell from 0.73 to 0.62 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.79% to 4.02%. Points fell from 0.39 to 0.37 (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% in the week ending 11th March. The index had increased 8.5% in the previous week.

The Refinance Index declined 3% and was 49% lower than the same week a year ago. In the week prior, the index increased by 9%.

The refinance share of mortgage activity decreased from 49.5% to 48.4%. In the previous week, the share fell from 49.9% to 49.5%.

According to the MBA,

  • Mortgage rates continue to be volatile due to the significant uncertainty regarding FED policy and the war in Ukraine.
  • Investors are considering the impacts of rapidly increasing inflation in the U.S and the world against the possible slowdown in growth due to supply-chain disruption.
  • 30-year fixed mortgage rate increased to 4.27%, the highest since May 2019.

For the week ahead

It’s a particularly quiet start to the week, with no major U.S stats for the markets to consider. While there are no stats, FED Chair Powell is scheduled to speak on Monday and Wednesday. Expect any monetary policy chatter to influence Treasury yields.

Away from the economic calendar, news updates on Russia and Ukraine will also continue to dictate the direction for U.S Treasuries.

U.S Mortgage Rates Rise, with War in Ukraine Driving Market Volatility

Mortgage rates rose for the first time in 3-weeks.

In the week ending 10th March, 30-year fixed rates increased by 9 basis points to 3.85%. 30-year fixed rates had fallen by 13 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 80 basis points.

30-year fixed rates were still down by 109 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a particularly quiet first half of the week, with economic data from the U.S limited to trade data and JOLTs job opening figures. While the stats were skewed to the negative, the numbers had a muted impact on yields and the Greenback.

Economic data from the U.S took a back seat for another week, as news updates on Russia’s invasion of Ukraine directed U.S Treasury yields.

Freddie Mac Rates

The weekly average rates for new mortgages, as of 10th March, were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 9 basis points to 3.85% in the week. This time last year, rates had stood at 3.05%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates increased by 8 basis points to 3.09% in the week. Rates were up by 71 basis points from 2.38% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates rose by 6 basis points to 2.97%. Rates were up by 20 basis points from 2.77% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates tracked U.S Treasury yields higher in the week.
  • Long-term, rates are expected to continue rising alongside inflation.
  • Near-term, uncertainty about the war in Ukraine will likely continue to drive rate volatility.

Mortgage Bankers’ Association Rates

For the week ending 4th March, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances fell from 4.15% to 4.09%. Points remained unchanged at 0.44 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 4.15% to 4.12%. Points fell from 0.74 to 0.73 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances declined from 3.88% to 3.79%. Points fell 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, increased 8.5% in the week ending 4th March. The index had slipped by 0.7% in the previous week.

The Refinance Index increased by 9% and was 50% lower than the same week a year ago. In the week prior, the Index had risen 1%.

The refinance share of mortgage activity decreased from 49.9% to 49.5%. In the previous week, the share fell from 50.1% to 49.9%.

According to the MBA,

  • Mortgage rates fell for the first time in 12-weeks, with Russia’s invasion of Ukraine driving investor flight to quality.
  • A fall in 30-year fixed mortgage rates supported a pickup in refinancing activity.
  • Disruptions in oil and other commodity flows could push inflation higher, which will likely lead to a period of volatility in rates.
  • Purchase activity was rose. Home buyers responded to lower rates.
  • The average loan size remained near to record highs.

For the week ahead

It’s a busier first half of the week. U.S wholesale inflation and retail sales figures will be in focus. While both sets of numbers will influence, the FED monetary policy decision and projections will be the main driver on Wednesday.

Away from the economic calendar, news updates on Russia and Ukraine will also continue to dictate the direction for U.S Treasuries.

U.S Mortgage Rates Slide in Response to Russia’s Invasion of Ukraine

Mortgage rates hit reverse going into March, ending a string of weekly increases through mid-February.

In the week ending 24th February, 30-year fixed rates slid by 13 basis points to 3.76%. 30-year fixed rates had slipped by 3 basis points in the week prior.

Year-on-year, 30-year fixed rates were up by 74 basis points.

30-year fixed rates were still down by 118 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

Economic data from the U.S took a back seat as demand for the safe havens saw a slide in U.S Treasury yields, which weighed on mortgage rates. Russia’s invasion of Ukraine weighed heavily on riskier assets in the week.

Freddie Mac Rates

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

  • 30-year fixed rates slid by 13 basis points to 3.76% in the week. This time last year, rates had stood at 3.02%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 13 basis points to 3.01% in the week. Rates were up by 67 basis points from 2.34% a year ago. The average fee rose from 0.7 points to 0.8 points.
  • 5-year fixed rates declined by 7 basis points to 2.91%. Rates were up by 18 basis points from 2.73% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Geopolitical tensions led to a fall in U.S Treasury yields as investors moved to the safety of bonds.
  • Falling yields led to a decline in mortgage rates.
  • While inflationary pressures remain, the impact of the war in Ukraine has caused market uncertainty.
  • Rates are expected to stay low in the short term but will likely resume the upward trend in the coming months.

Mortgage Bankers’ Association Rates

For the week ending 25th February, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.05% to 4.15%. Points decreased from 0.48 to 0.44 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.09% to 4.15%. Points rose from 0.56 to 0.74 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.84% to 3.88%. Points fell from 0.45 to 0.40 (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, slipped by 0.7% in the week ending 25th February. The Index tumbled by 13.1% in the previous week.

The Refinance Index increased by 1% and was 56% lower than the same week a year ago. In the week prior, the Index had fallen 16%.

The refinance share of mortgage activity fell from 50.1% to 49.9%. In the previous week, the share decreased from 52.8 to 50.1%.

According to the MBA,

  • Mortgage rates reached multi-year highs, weighing on application activity.
  • As a result of rising rates, the refinance share of applications fell below 50%.
  • Purchase activity remained weak, but the average loan size increased again.
  • The MBA will continue to assess the potential impact on mortgage demand from the sharp drop in interest rates this week due to the invasion of Ukraine.

For the week ahead

It’s a quiet first half of the week, with stats limited to U.S JOLT’s job openings. Market sentiment towards Russia’s invasion of Ukraine and news updates will remain the key driver. A further escalation of military strikes on Ukraine and responses by NATO, the United Nations, and Western governments would drive demand for bonds and weigh on mortgage rates.

U.S Mortgage Rates Hold Steady Despite Rising Geopolitical Risk

Mortgage rates held relatively steady after a spike in early February.

In the week ending 24th February, 30-year fixed rates slipped by three basis points to 3.89%. 30-year fixed rates had jumped by 23 basis points in the week prior. 30-year fixed rates held above the 3% mark for a 15th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 92 basis points.

30-year fixed rates were still down by 105 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

U.S economic data was on the light side in the first half of the week. Private sector PMI and consumer confidence figures for February were in focus. The numbers were positive, with a sharp pickup in service sector activity positive for U.S Treasury yields.

In February, the services PMI jumped from 51.2 to 56.7, driving the composite PMI from 51.1 to 56.0. While private-sector PMIs were positive, consumer confidence weakened. In February, the CB Consumer Confidence Index slipped from 111.1 to 110.5.

While the stats were upbeat, geopolitics weighed on demand for riskier assets in the week.

Freddie Mac Rates

The weekly average rates for new mortgages as of 24th February were quoted by Freddie Mac to be:

  • 30-year fixed rates slipped by 3 basis points to 3.89% in the week. This time last year, rates stood at 2.87%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 1 basis point to 3.14% in the week. Rates were up by 80 basis points from 2.34% a year ago. The average fee fell from 0.8 points to 0.7 points.
  • 5-year fixed rates held steady at 2.98%. Rates were down by 1 basis point from 2.99% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Despite the decline in mortgage rates, rates have increased by more than a full percent in six months.
  • Economic growth remains strong while rising inflation impacts consumer sentiment, which has taken a hit at the turn of the year.
  • Higher mortgage rates and low inventories will likely support a further upward trend in house prices before easing back later in the year.

Mortgage Bankers’ Association Rates

For the week ending 18th February, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 4.05% to 4.06%. Points increased from 0.45 to 0.48 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 4.01% to 4.09%. Points fell from 0.59 to 0.56 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.81% to 3.84%. Points rose from 0.39 to 0.45 (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, tumbled by 13.1% in the week ending 18th February. The Index had fallen by 5.4% in the previous week.

The Refinance Index slid by 16% and was 56% lower than the same week one year ago. In the week prior, the Index had fallen 9%.

The refinance share of mortgage activity decreased from 52.8 to 50.1%. In the previous week, the share had declined from 56.2% to 52.8%.

According to the MBA,

  • Mortgage applications fell to their lowest level since December 2019, weighed by the upward trend in mortgage rates.
  • Higher mortgage rates have hit refinances, with refinance activity down in six of the first seven weeks of the year.
  • While the average loan size did not increase in the week, it hovered around last week’s survey record high of $453,000.

For the week ahead

From the U.S, ISM Manufacturing and ADP nonfarm employment change figures will be key early in the week. While the stats will draw attention, geopolitics will be the key driver. Last Thursday, Russia invaded Ukraine, driving demand for the safe-havens. Progress towards an end to the invasion would support a further pickup in mortgage rates.

U.S Mortgage Rates Surge for a Second Consecutive Week

Mortgage rates were on the move once more, after having barely moved through January.

In the week ending 17th February, 30-year fixed rates jumped by 23 basis points to 3.92%. 30-year fixed rates had risen by 14 basis points to 3.69% in the week prior. As a result, 30-year fixed rates held above the 3% mark for a 14th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 111 basis points. 30-year fixed rates were still down by 102 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, with key stats including wholesale inflation and retail sales figures. The stats supported the more hawkish FED stance on monetary policy. In January, the producer price index rose by a further 1.0% after having risen by 0.4% in December.

Retail sales jumped by 3.8% in January, reversing a 2.5% slide from December.

With the markets focused on the FED, the FOMC meeting minutes also drew attention on Wednesday. While the minutes were less hawkish than expected, rate hikes are around the corner, supporting the pickup in mortgage rates. Inflation figures from the week prior also supported the jump in mortgage rates, with the U.S annual rate of inflation accelerating from 7.0% to 7.5% in January.

Freddie Mac Rates

The weekly average rates for new mortgages as of 17th February were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 23 basis points to 3.92% in the week. This time last year, rates had stood at 2.81%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates surged by 22 basis points to 3.15% in the week. Rates were up by 94 basis points from 2.21% a year ago. The average fee remained unchanged at 0.8 points.
  • 5-year fixed rates increased by 18 basis point to 2.98%. Rates were up by 21 basis points from 2.77% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Higher inflation and stronger than expected consumer spending drove mortgage rates higher in the week.
  • As rates and house prices rise, affordability has become a major hurdle for those looking to buy a home.
  • The further increase in consumer prices will place further constraints on potential home buyers.

Mortgage Bankers’ Association Rates

For the week ending 11th February, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.83% to 4.05%. Points increased from 0.40 to 0.45 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.93% to 4.01%. Points rose from 0.54 to 0.59 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.62% to 3.81%. Points rose from 0.35 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 5.4% in the week ending 11th February. The Index had slid by 8.1% in the previous week.

The Refinance Index slid by 9% from the previous week and was 54% lower than the same week one year ago. In the week prior, the Index had fallen by 7%.

The refinance share of mortgage activity decreased from 56.2% to 52.8%. In the previous week, the share had declined from 57.3% to 56.2%

According to the MBA,

  • Mortgage rates rose across the board following the recent increase in Treasury yields.
  • A further pickup in inflationary pressure and market expectations of a more aggressive FED policy response have pushed yields higher.
  • The 30-year fixed rate saw the most marked weekly increase since March 2020. More significantly, the 30-year fixed rate hit 4% for the first time since 2019.
  • As a result of higher rates, refinance applications fell further, with the refinance share of applications at its lowest level since mid-2019.
  • The average loan size rose to $453,000, another record high.

For the week ahead

Key U.S stats include prelim private sector PMI and U.S consumer confidence figures early in the week. While the numbers will influence, geopolitics will also provide U.S Treasuries with direction in the week. The markets will be monitoring news updates on Russia and chatter from Capitol Hill.

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

Mortgage rates held steady in the 1st week of February, after barely moving in the week prior.

In the week ending 3rd February, 30-year fixed rates remained unchanged at 3.55%. 30-year fixed rates had slipped by 1 basis point to 3.55% in the previous week. As a result, 30-year fixed rates held above the 3% mark for an 12th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 82 basis points.

30-year fixed rates were still down by 139 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a busier start to the week, with manufacturing sector PMI and ADP nonfarm employment change key stats.

The stats were skewed to the negative, suggesting that the economic recovery hit a speed bump at the turn of the year.

Freddie Mac Rates

The weekly average rates for new mortgages as of 3rd February were quoted by Freddie Mac to be:

  • 30-year fixed rates remained unchanged at 3.55% in the week. This time last year, rates had stood at 2.73%. The average fee increased from 0.7 points to 0.8 points.
  • 15-year fixed fell by 3 basis point to 2.77% in the week. Rates were up by 56 basis points from 2.21% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates increased by 1 basis point to 2.71%. Rates were down by 7 basis points from 2.78% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • The economy lost some momentum in January, leaving mortgage rates flat for a 3rd week in a row.
  • This stagnation was attributed to the Omicron strain, which is likely to abate in the months ahead.
  • With the economic recovery expected to continue into the spring and summer, mortgage rates are likely to resume their upward trend.
  • Recent data indicates that homebuyer demand remains elevated, while supply remains low, driving prices northwards.

Mortgage Bankers’ Association Rates

For the week ending 28th January, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.72% to 3.78%. Points decreased from 0.43 to 0.41 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.69% to 3.86%. Points decreased from 0.61 to 0.55 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.56% to 3.59%. Points fell from 0.38 to 0.31 (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, jumped by 12% in the week ending 28th January, reversing a 7.1% slide from the previous week.

The Refinance Index surged by 18% and was 50% lower than the same week one year earlier. In the previous week, the index had tumbled by 13%.

The refinance share of mortgage activity increased from 55.8% to 57.3%. In the previous week, the share had decreased from 60.3% to 55.8%.

According to the MBA,

  • Most mortgage rates continued to rise, with the 30-year fixed hitting its highest level since March 2020.
  • Refinance applications surged in spite of the rise in rates, though the numbers were likely affected by the holidays.
  • Purchase applications were on the rise but remained 7% down from a year earlier.
  • The average loan size hit a new survey high $441,100, driven by low inventories and house price appreciation.

For the week ahead

It’s a particularly quiet start to the week for the U.S markets. There are no major stats due out in the 1st half of the week to influence yields and mortgage rates. The lack of stats will leave last week’s nonfarm payrolls and central bank chatter to provide direction.

Away from the economic calendar, however, geopolitics will be an area of focus.