U.S Mortgage Rates Start the Year with Another Record Low

Mortgage rates failed to fall to an 18th record low in the current downtrend, with 30-year fixed rates on the decline in the first week of the year.

Compared to this time last year, 30-year fixed rates were down by 99 basis points.

30-year fixed rates were also down by 229 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the busier side in the 1st half of the week.

Private sector PMI figures were in focus along with labor market numbers.

It was a mixed set of numbers. While there was a pickup in private sector activity, employment figures disappointed.

In December, the ISM Manufacturing PMI increased from 57.5 to 60.7, while nonfarm employment fell by 123k according to the ADP.

Factory orders were also positive, however, rising by 1% in November, supporting the pickup in manufacturing sector activity in December.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 2 basis points to 2.65% in the week. This time last year, rates stood at 3.66%. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 1 basis point to 2.16% in the week. Rates were down by 91 basis points from 3.07% a year ago. The average fee slipped from 0.7 points to 0.6 points.
  • 5-year fixed rates rose by 4 basis points to 2.75%. Rates were down by 55 points from 3.30% a year ago. The average fee fell from 0.4 points to 0.3 points.

According to Freddie Mac,

  • A new year, a new record low.
  • Despite a full percentage point decline in rates over the past year, housing affordability has decreased.
  • Record low mortgage rates have been offset by rising house prices.
  • Rates are poised to rise modestly this year, as the forces behind the decline in the drop in mortgage rates have shifted.
  • The rise in mortgage rates and rising house prices will accelerate the decline in affordability.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 2.90% to 2.86%. Points increased from 0.31 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.09% to 3.08%. Points increased from 0.30 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, slid by 4.2% in the week ending 1st January. In the week ending 18th December, the Index had increased by 0.8%.

The Refinance Index fell by 6% and was 100% higher than the same week a year ago. In the week prior, the index had risen by 4%.

According to the MBA,

  • Mortgage rates started the year close to record lows, most notably with the 30-year fixed rate at 2.86%.
  • Record-low rates for fixed-rate mortgages is good news for borrowers looking to refinance or buy a home, as around 98% of all applications are for fixed-rate loans.
  • Despite these low rates, overall application activity fell sharply during the holiday period, which is typical every year.
  • The steady demand for home buying throughout most of 2020 should continue in 2021.
  • MBA is forecasting for purchase originations to rise to $1.59 trillion this year – an all-time high.

For the week ahead

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

Key stats include JOLTs job openings for November and December inflation figures.

Expect inflation figures to influence along with last week’s nonfarm payroll and jobless claims figures.

Away from the economic calendar, U.S politics and COVID-19 news will remain in focus.

U.S Mortgage Rates Rise in the Final Week of the Year

Mortgage rates failed to fall to a 17th record low of the year, with 30-year fixed rates on the rise in the final week of the year. 30-year fixed rates rose by 1 basis point to 2.67% in the week ending 31st December.

Compared to this time last year, 30-year fixed rates were down by 105 basis points.

30-year fixed rates were also down by 227 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side in the 1st half of the week.

November goods trade data and pending home sales were in focus along with Chicago PMI numbers for December.

Pending home sales fell by 2.6%, following a 0.90% decline in October. Also negative was a widening in the trade deficit from $80.42bn to $84.82bn.

On the positive, however, was a rise in the Chicago PMI from 58.2 to 59.5.

Low mortgage rates and tight inventories continued to support house prices. In October, the S&P/CS HPI Composite – 20 n.s.a rose by 7.9% year-on-year. In September, the house price index had risen by 6.6%.

Freddie Mac Rates

The weekly average rates for new mortgages as of 31st December were quoted by Freddie Mac to be:

  • 30-year fixed rates rose by 1 basis point to 2.67% in the week. This time last year, rates stood at 3.72%. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 2 basis points to 2.17% in the week. Rates were down by 99 basis points from 3.16% a year ago. The average fee rose from 0.5 points to 0.7 points.
  • 5-year fixed rates fell by 8 basis points to 2.71%. Rates were down by 75 points from 3.46% a year ago. The average fee rose from 0.2 points to 0.4 points.

According to Freddie Mac,

  • A more than 1% drop in mortgage rates over the year drove housing market activity in 2020.
  • Moving into 2021, Freddie Mac expects rates to remain flat, potentially rising off their record low.
  • Solid purchase demand and tight inventory will continue to put pressure on housing markets as well as house price growth.

Mortgage Bankers’ Association Rates

Numbers for the week ending 25th December and 1st January will be available on 6th January 2021.

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 2.85% to 2.86%. Points remained unchanged at 0.33 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 2.96% to 2.90%. Points fell from 0.42 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.12% to 3.10%. Points decreased 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 0.8% in the week ending 18th December. In the week prior, the Index had risen by 1.1%.

The Refinance Index increased by 4% and was 124% higher than the same week a year ago. In the week prior, the index had risen by 1%.

The refinance share of mortgage activity rose from 72.7 to 74.8%. In the previous week, the share had increased from 72.0% to 72.7%.

For the week ahead

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

Key stats include December’s ISM Manufacturing PMI and finalized Markit survey private sector PMIs.

Factory orders and ADP employment change figures will also draw attention in the 1st half of the week.

From elsewhere, expect private sector PMI numbers from China to also influence.

Away from the economic calendar, COVID-19 and updates from Capitol Hill will also influence U.S Treasury yields.

U.S Mortgage Rates Fall to a 16th Record Low of the Year ahead of the Holidays

Mortgage rates fell to a 16th record low of the year after a 4 basis points fall to a 15th record low in the previous week.

Compared to this time last year, 30-year fixed rates were down by 108 basis points.

30-year fixed rates were also down by 228 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the busier side in the 1st half of the week.

November personal spending, inflation, and core durable goods orders, together with consumer confidence and jobless claims figures were in focus.

It was a mixed bag on the economic data front. Consumer confidence waned in December, while initial jobless claims fell from 892k to 805k.

The annual rate of core inflation held steady at 1.4%, while personal spending fell by a larger than expected 0.4%.

Durable goods and core durable goods orders continued to rise, however, following October’s jump, supporting riskier assets.

From Capitol Hill, progress towards a COVID-19 stimulus package was risk positive, while continued concerns over COVID-19 and news of new strains tested support in the week.

Later in the week, U.S President Trump refused to sign the COVID-19 stimulus package. Hopes of a better package supported riskier assets mid-week before news of lawmakers refusing Trump’s demands hit the wires.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 1 basis point to a new low of 2.66% in the week. This time last year, rates stood at 3.74%. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 2 basis points to 2.19% in the week. Rates were down by 100 basis points from 3.19% a year ago. The average fee fell from 0.6 points to 0.5 points.
  • 5-year fixed rates held steady at 2.79% for a 2nd consecutive week. Rates were down by 66 points from 3.45% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • The housing market is set to finish the year strong as low mortgage rates continue to fuel homebuyer demand.
  • Refinance activity also remains robust with mortgage rates at record lows.
  • Looking ahead to 2021, Freddie Mac expects rates to hold steady. A key driver, in the near-term, however, will be the trajectory of the COVID-19 pandemic and the execution of the vaccine.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 2.85% to 2.86%. Points remained unchanged at 0.33 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 2.96% to 2.90%. Points fell from 0.42 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.12% to 3.10%. Points decreased 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 0.8% in the week ending 18th December. In the week prior, the Index had risen by 1.1%.

The Refinance Index increased by 4% and was 124% higher than the same week a year ago. In the week prior, the index had risen by 1%.

The refinance share of mortgage activity rose from 72.7 to 74.8%. In the previous week, the share had increased from 72.0% to 72.7%.

According to the MBA,

  • Mortgage rates are closing the year at record lows, with the 30-year fixed rate – at 2.86% – a full percentage point below a year ago.
  • Purchase applications fell for the 2nd time in 3-weeks, though remained 26% higher than the same week a year ago.
  • The average loan balance reached another record high.

Numbers for the week ending 25th December and 1st January will be available on 6th January 2021.

For the week ahead

It’s a relatively quiet 1st half of a shortened week on the U.S economic calendar.

Key stats include November trade data and December Chicago PMI figures. We don’t expect too much influence from the stats, however.

COVID-19 news updates and market sentiment towards the COVID-19 stimulus package will likely remain key drivers.

U.S Mortgage Rates Slide to a 15th Low of the Year

Mortgage rates fell to a 15th record low of the year, after having held steady in the week prior.

Compared to this time last year, 30-year fixed rates were down by 106 basis points.

30-year fixed rates were also down by 227 basis points since November 2018’s most recent peak of 4.94%.

The 15th record low resulted from market uncertainty over talks on Capitol Hill, disappointing economic data, and a dovish FED.

Economic Data from the Week

Economic data was on the busier side in the 1st half of the week.

Industrial production figures for November and December Empire State Manufacturing numbers disappointed on Tuesday.

Of greater significance, however, was another fall in retail and core retail sales in November. The continued fall in consumption was a reflection of labor market conditions.

With the COVID-19 pandemic slowing the economic recovery, service sector activity saw slower growth in December. The Services PMI fell from 58.4 to 55.3, according to prelim figures.

Following a string of disappointing labor market and inflation figures, the FED delivered the assurance of continued support. While leaving monetary policy unchanged, the FED stated that it would maintain purchasing at least $120bn worth of bonds monthly until progress is made towards maximum employment and inflation targets.

Lower for longer and question markets over the economic recovery offset the positive COVID-19 vaccine news in the week.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 4 basis points to a new low of 2.67% in the week. This time last year, rates stood at 3.73%. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 5 basis points to 2.21% in the week. Rates were down by 98 basis points from 3.19% a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates held steady at 2.79% in the week. Rates were down by 58 points from 3.37% a year ago. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • The housing market continues to surge, supporting an otherwise stagnant economy that has recently lost momentum.
  • Mortgage rates are at record lows pushing prospective homebuyers off the sidelines and into the market.
  • Homebuyer sentiment is sanguine and purchase demand shows no real signs of waning heading into next year.

Mortgage Bankers’ Association Rates

For the week ending 11th December:

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 2.90% to a new survey low of 2.85%. Points decreased from 0.35 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, increased by 1.1% in the week ending 11th December. In the previous week, the index had fallen by 1.2%.

The Refinance Index increased by 1% and was 105% higher than the same week a year ago. In the week prior, the index had increased by 2%.

The refinance share of mortgage activity rose from 72.0% to 72.7%. The share had risen from 69.5% to 72.0% in the week prior.

According to the MBA,

  • U.S Treasury yields stayed low last week, in part due to uncertainty over the COVID-19 stimulus package. Concerns over a continued rise in new COVID-19 cases also pinned back yields.
  • Homeowners responded to a decline in rates, with refinance activity rising for a 2nd consecutive week.
  • The ongoing strength in the housing market has carried into December.
  • Applications to buy a home increased for the 4th time in 5-weeks.

For the week ahead

It’s another relatively busy 1st half of a shortened week on the U.S economic calendar.

Key stats include November inflation and personal spending figures. From the housing sector, existing and new home sales will draw interest but would unlikely impact mortgage rates, however.

Finalized 3rd quarter GDP numbers and December consumer sentiment figures should also lack influence.

Away from the economic calendar, updates from Capitol Hill on stimulus talks and COVID-19 news updates will influence, however.

U.S Mortgage Rates Flat after a 14th Record Low

Mortgage rates held steady in the week ending 10th December. In the week prior, 30-year fixed year rates had fallen by 1 basis point to a 14th record low of the year.

Compared to this time last year, 30-year fixed rates were down by 102 basis points.

30-year fixed rates were down by 223 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the quieter side in the 1st half of the week. Key stats included 3rd quarter nonfarm productivity and unit labor costs and JOLTs job openings for October.

The stats had a muted impact on yields and mortgage rates, however. The focus remained on COVID-19, vaccine news, and chatter from Capitol Hill.

Freddie Mac Rates

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

  • 30-year fixed rates remained unchanged at 2.71% in the week. Rates were down from 3.73% a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates remained unchanged at 2.26% in the week. Rates were down by 93 basis points from 3.19% a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates fell by 7 basis points to 2.79% in the week. Rates were down by 57 points from 3.36% a year ago. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • Mortgage rates remain at record lows, resisting their typical correlation to Treasury yields, which have been on the rise.
  • Mortgage spreads – the difference between mortgage rates and the 10-year Treasury rate – are declining from their elevated levels earlier this year.
  • While today’s mortgage rate spread is about 1.8 percentage points, there is room for a further narrowing if yields continue to rise.
  • Freddie Mac is encouraged to see that the spread is almost back to normal levels.

Mortgage Bankers’ Association Rates

For the week ending 4th December, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.00% to a survey low 2.97%. Points rose from 0.34 to 0.40 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed to conforming loan balances decreased from 2.92% to a survey low 2.90%. Points increased from 0.31 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.19% to 3.20%. Points decreased from 0.30 to 0.28 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, fell by 1.2% in the week ending 4th December. In the week prior, the index had slipped by 0.6%.

The Refinance Index increased by 2% and was 89% higher than the same week a year ago. In the week prior, the index had decreased by 5%.

The refinance share of mortgage activity rose from 69.5% to 72.0%. The share had fallen from 71.1% to 69.5% in the week prior.

According to the MBA,

  • Refinance activity increased last week in response to mortgage rates falling to survey lows.
  • The ongoing refinance wave has continued through the fall, with activity last week up 89% from a year ago.
  • The purchase market is also poised to finish 2020 on a strong note.
  • Applications fell slightly last week but were around 3% higher than the 2-weeks leading up to Thanksgiving.

For the week ahead

It’s a relatively busy 1st half of the week on the U.S economic calendar.

Key stats include industrial production and retail sales figures for November, and prelim private sector PMI numbers for December.

Expect retail sales and service sector PMI numbers to have the greatest impact on yields.

On the monetary policy front, the FED is also in action on Wednesday. Low rates for longer would support mortgage rates at current lows.

From elsewhere, economic data from China and the Eurozone will also influence.

Away from the economic calendar, however, Brexit, COVID-19 news, and chatter from Capitol Hill will remain key yield drivers.

U.S Mortgage Rates Fall to a 14th Record Low of the Year

Mortgage rates fell to a 14th record low of the year, after having held steady in the previous week. In the week ending 3rd December, 30-year fixed rates slipped by 1 basis point to 2.71%.

From this time last year, 30-year fixed rates were down by 97 basis points.

30-year fixed rates were also down by 223 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the quieter side in the 1st half of the week.

The market’s preferred ISM Manufacturing and ADP nonfarm employment change figures for November were in focus.

The stats were negative, with the ISM Manufacturing PMI falling from 59.3 to 57.5. Labor market indicators also continued to flash red, with the ADP reporting just 307k nonfarm payroll jobs added in November. Economists had forecast a 410k rise in nonfarm payrolls.

Away from the economic calendar, progress towards a COVID-19 vaccine failed to support mortgage rates in the week. The FED’s outlook on close to zero interest rates weighed on mortgage rates, as mortgage and refinance applications continued to defy gravity.

Freddie Mac Rates

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

  • 30-year fixed rates slipped by 1 basis point to 2.71% in the week. Rates were down from 3.68% from a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 2 basis points to 2.26% in the week. Rates were down by 88 basis points from a year ago 3.14%. The average fee held steady at 0.6 points.
  • 5-year fixed rates slumped by 30 basis points to 3.86% in the week. Rates were down by 53 points from last year’s 3.39%. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • Despite persistently low mortgage rates, home sales have hit a wall.
  • A scarcity of inventories has put a limit on how much higher sales can increase.
  • The record low supply, combined with strong demand, means that home prices are on a rapid rise, eroding the benefits of the low mortgage rate environment.

Mortgage Bankers’ Association Rates

For the week ending 27th November, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from a survey low 2.99% to 3.00%. Points rose from 0.27 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at a survey low 2.92%. Points decreased from 0.35 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.18% to 3.19%. Points increased from 0.27 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, slipped by 0.6% in the week ending 27th November. In the week prior, the Index had increased by 3.9%.

The Refinance Index decreased by 5% and was 102% higher than the same week a year ago. In the week prior, the Index had increased by 5%.

The refinance share of mortgage activity fell from 71.1% to 69.5%. The share had risen from 69.8% to 71.1% in the week prior.

According to the MBA,

  • Purchase applications were on the rise, while refinance applications declined.
  • Purchase activity continued to show impressive year-on-year gains.
  • There was also a significant rise in purchase loan amounts, which hit an average $375,000 last week, the highest since the survey began in 1990.
  • Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade.
  • The low mortgage rate environment continues to spark borrower demand, and the mortgage industry is on target for its strongest year of originations since 2003.

For the week ahead

It’s a relatively quiet 1st half of the week on the U.S economic calendar.

Key stats include 3rd quarter nonfarm productivity and unit labor costs and October JOLTs job openings. With the market focus on U.S stimulus talks on Capitol Hill and COVID-19 vaccine news updates, the stats would likely have a muted impact on yields.

The key drivers in the week will likely be COVID-19 vaccine production projections and the FDA’s decision on Pfizer Inc. and Moderna Inc.’s vaccines.

Expect a jump in demand for riskier assets and U.S Treasury yields if lawmakers pass a COVID-19 stimulus package.

U.S Mortgage Rates Hold Steady at Record Lows

Mortgage rates held steady following a previous week slide to a 13th record low of the year. In the week ending 26th November, 30-year fixed rates remained unchanged following a 12 basis points slide in the week prior.

Compared to this time last year, 30-year fixed rates were down by 96 basis points.

30-year fixed rates were also down by 222 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the busier side in the 1st half of the week.

Prelim November private sector PMIs, consumer confidence, the weekly jobless claims, and October core durable goods, personal spending, and inflation figures were in focus.

While private PMI numbers impressed, consumer confidence and labor market numbers disappointed.

Also positive, however, was a further increase in core durable goods orders and personal spending.

While the stats delivered mixed results, with labor market figures raising more concerns, progress towards a COVID-19 vaccine was market risk positive.

Freddie Mac Rates

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

  • 30-year fixed rates remained unchanged at 2.72% in the week. Rates were down from 3.68% from a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates also remained unchanged at 2.28% in the week. Rates were down from 3.15% compared with a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates jumped by 31 basis points to 3.16% in the week. Rates were down by 27 points from last year’s 3.43%. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • Mortgage rates remained at record lows and, while that has fueled a refinance boom, higher-income borrowers have driven the boom.
  • Lower-and middle-income borrowers are leaving money on the table by not taking advantage of low rates.
  • Demand from homebuyers continues to surge and it has created a seller’s market. Inventories sit at record lows and house prices are rising, which is beginning to offset the benefits of low rates.

Mortgage Bankers’ Association Rates

For the week ending 20th November, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.11% to a survey low of 2.99%. Points fell from 0.37 to 0.27 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances fell from 2.99% to a survey low of 2.92%. Points decreased from 0.37 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.11% to 3.18%. Points decreased from 0.28 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, increased by 3.9% in the week ending 20th November. In the week prior, the Index had slipped by 0.3%.

The Refinance Index increased by 5% and was 79% higher than the same week a year ago. In the week prior, the Index had decreased by 2%.

The refinance share of mortgage activity rose from 69.8% to 71.1%. The share had fallen from 70.0% to 69.8% in the week prior.

According to the MBA,

  • Weekly mortgage volatility has emerged again, as markets respond to fiscal policy uncertainty and surge in new COVID-19 cases.
  • The decline in rates ignited borrower interest, with applications for both home purchases and refinances rising on a weekly and annual basis.
  • Both the refinance index and the share of refinance applications were at their highest levels since April.
  • Purchase activity has surpassed year-ago levels for over 6-months.

For the week ahead

It’s a relatively busy 1st half of the week on the U.S economic calendar.

Key stats include ISM Manufacturing and Non-Manufacturing PMIs for November and ADP nonfarm employment change figures.

While we will expect the numbers to influence, the news wires will also provide U.S Treasuries with direction in the week.

Away from the economic calendar, U.S politics, COVID-19 news updates, and Brexit will be key areas of interest.

U.S Mortgage Rates Hit a 13th Record Low for the Year

Mortgage rates fell for the 2nd time in 4-weeks in the week ending 19th November. Reversing a 6 basis point rise from the week prior, the 30-year fixed-rate slid by 12 basis points.

Compared to this time last year, 30-year fixed rates were down by 94 basis points.

30-year fixed rates were down by 222 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the busier side in the 1st half of the week.

Key stats included New York Empire State Manufacturing numbers, retail sales, and industrial production figures.

The stats were skewed to the negative, with retail sales and manufacturing numbers disappointing.

Industrial production figures did come out ahead of forecasts but were not enough to support yields.

From the housing sector building permit and housing start numbers for October also had a muted impact on market risk sentiment.

A reintroduction of containment measures to curb the surge in the number of new COVID-19 cases also weighed. Progress towards a COVID-19 vaccine provided some cushioning in the week, however.

Freddie Mac Rates

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

  • 30-year fixed rates decreased by 12 basis points to 2.72% in the week. Rates were down from 3.66% from a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 6 basis points to 2.28% in the week. Rates were down from 3.15% compared with a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates tumbled by 26 basis points to 2.85% in the week. Rates were down by 54 points from last year’s 3.39%. The average fee fell from 0.4 points to 0.3 points.

According to Freddie Mac,

  • Weaker consumer spending drove mortgage rates to a record low in the week.
  • While economic growth remains unstable, however, strong housing demand continues to have a domino effect on many other segments of the economy.

Mortgage Bankers’ Association Rates

For the week ending 13th November, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, remained increased from 3.08% to 3.11%. Points remained unchanged 0.37 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances rose from 2.98% to 2.99%. Points increased from 0.35 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.13% to 3.11%. Points decreased from 0.31 to 0.28 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, slipped by 0.3% in the week ending 13th November. In the week prior, the Index had fallen by 0.5%.

The Refinance Index decreased by 2% but was 98% higher than the same week a year ago. In the week prior, the index had risen by 1%.

The refinance share of mortgage activity fell from 70.0% to 69.8%. In the week prior, the share had risen from 68.7% to 70.0%.

According to the MBA,

  • Mortgage activity was mixed last week, despite the 30-year fixed-rate mortgage remaining below 3%.
  • The purchase market recovered from its recent weekly slump, with activity rising 3%. It was the 26th straight week, where purchase applications climbed above one-year ago levels.
  • Housing demand remains supported by the ongoing labor market recovery and increased demand for more space stemming from the pandemic.
  • While the refinance index fell last week, demand remained robust and was 98% above a year ago.
  • The average refinance loan balance of $291,000 last week was the lowest since January, however. Borrowers with higher loan balances may have acted earlier on.

For the week ahead

It’s a particularly busy 1st half of a shortened week on the U.S economic calendar.

Key stats include prelim private sector PMIs, consumer confidence, durable goods, and weekly jobless claims figures.

Trade data, 2nd estimate GDP numbers, and inflation and consumer sentiment figures are also due out.

Away from the economic calendar, U.S politics, COVID-19 news updates, and Brexit will continue to influence.

U.S Mortgage Rates Rise on COVID-19 Vaccine Optimism

Mortgage rates rose for the 2nd time in 3-weeks in the week ending 12th November. Reversing a 3 basis point fall to a 12th record low 2.78% in the week prior, the 30-year fixed rate rose by 6 basis points.

Compared to this time last year, 30-year fixed rates were down by 91 basis points.

30-year fixed rates were also down by 210 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side in the 1st half of the week.

Key stats included JOLTs job openings for September. A fall in job openings from August’s 6.493m to 6.440m had a muted impact on yields and risk sentiment, however.

Impressive COVID-19 vaccine trial results from Pfizer Inc. and BioNTech SE drove demand for riskier assets early in the week. Pfizer Inc. reported more than a 90% efficacy rate from 3rd phase of vaccine trials on Monday.

The impressive results nullified any concerns over the continued rise in new COVID-19 cases globally.

Biden’s Presidential Election victory announcement from the weekend prior was also considered positive for riskier assets. The markets were also convinced that Trump’s lawsuits and state recounts would fail to overturn the result.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 6 basis points to 2.84% in the week. Rates were down from 3.75% from a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates rose by 2 basis points to 2.34% in the week. Rates were down from 3.20% a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates jumped by 22 basis points to 3.11% in the week. Rates were down by 33 points from last year’s 3.44%. The average fee rose from 0.3 points to 0.4 points.

According to Freddie Mac,

  • Mortgage rates jumped as a result of positive news about a COVID-19 vaccine.
  • Despite the rise, mortgage rates remain about a percentage point below a year ago.
  • The low rate environment is supportive of both purchase and refinance demand.
  • Heading into late fall, the housing market continues to grow and buttress the economy.

Mortgage Bankers’ Association Rates

For the week ending 6th November, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.08%. Points rose from 0.26 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances fell from 3.01% to a survey low 2.98%. Points decreased from 0.38 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.18% to 3.13%. Points increased from 0.30 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, slipped by 0.5% in the week ending 6th November. In the week prior, the index had increased by 3.8%.

The Refinance Index increased by 1% and was 67% higher than the same week a year ago. In the week prior, the index had risen by 6%.

The refinance share of mortgage activity rose from 68.7% to 70.0%. In the week prior, the share had increased from 66.7% to 68.7%.

According to the MBA,

  • Mortgage application activity was mixed last week, despite the 30-year fixed rate falling to an all-time low 2.98%.
  • The refinance index climbed to its highest level since August, however, supported by a 1.5% increase in conventional finances.
  • For the purchase market, the recent slump continued, with the index falling for a 6th time in seven weeks. The latest fall left the index at its lowest level since May 2020.
  • Homebuyer demand is still strong overall, and activity was up 16.5% from a year ago.
  • Inadequate housing supply is putting upward pressure on home prices, impacting affordability.
  • The trend in larger average loan application sizes and growth in loan amounts points to a continued rise in home prices, as well as the strength in the upper end of the market.

For the week ahead

It’s a busier 1st half of the week on the U.S economic calendar.

Key stats include the NY Empire State Manufacturing Index, retail sales, and industrial production figures.

Expect retail sales figures due out on Tuesday to have the greatest impact on yields.

Housing sector figures on Wednesday will also draw attention, with October building permits and housing starts in focus.

Disappointing housing sector figures will likely raise further concerns over inventories and support further increases in house prices near-term.

From elsewhere, industrial production, retail sales, and unemployment numbers from China will also influence market risk sentiment.

Away from the economic calendar, U.S politics, COVID-19 news updates, and Brexit will also provide direction.

On the Brexit front, it’s the final few days of talks ahead of Thursday’s final deadline.

U.S Mortgage Rates Fall to a 12th Low for the Year

Mortgage rates fell to yet another all-time low in the week ending 5th November. Following a 1 basis point rise in the week prior, the 30-year fixed rate declined by 3 basis point to 2.78%. It was the 12th record low of the year.

Compared to this time last year, 30-year fixed rates were down by 91 basis points.

30-year fixed rates were also down by 216 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the heavier side in the 1st half of the week.

Key stats included the market’s preferred ISM private sector PMIs and ADP Nonfarm Employment figures for October.

It was another mixed bag on the data front.

Manufacturing sector activity saw a further pickup in October, with the ISM Manufacturing PMI rising from 53.3 to 53.4.

The all-important ISM Services PMI fell from 57.8 to 56.6, however, which was somewhat disappointing.

ADP nonfarm employment change figures also disappointed. A 365k increase in October fell well short of September’s 749k rise and a forecasted 650k increase.

While there were plenty of stats to consider, the U.S Presidential Election was the main event of the week.

A projected Joe Biden victory and a Republican hold of the Senate drove expectations of further monetary policy easing.

Policy gridlock on Capitol Hills is expected to place the onus on the FED to deliver support for the economic recovery.

There were also concerns over how Biden will influence, particularly with Biden unlikely to deliver planned infrastructure spending to support the economy.

Freddie Mac Rates

The weekly average rates for new mortgages as of 5th November were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 3 basis points to 2.78% in the week. Rates were down from 3.69% from a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates remained flat at 2.32% in the week. Rates were down from 3.13% compared with a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates increased by 1 basis points to 2.89% in the week. Rates were down by 50 points from last year’s 3.39%. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates fell to a 12th record low due to economic and political ambiguity.
  • Despite the uncertainty experienced this year, the housing market, buoyed by low rates, continues to be a bright spot.

Mortgage Bankers’ Association Rates

For the week ending 30th October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.14% to 3.08%. Points fell from 0.35 to 0.26 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.00% to 3.01%. Points rose from 0.35 to 0.38 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.28% to 3.18%. Points decreased from 0.31 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 3.8% in the week ending 30th October. In the week prior, the index had risen by 1.7%.

The Refinance Index increased by 6% and was 88% higher than the same week a year ago. In the previous week, the index had risen by 3%.

The refinance share of mortgage activity rose from 66.7% to 68.7%. In the week prior, the share had increased from 66.1% to 66.7%.

According to the MBA,

  • Mortgage rates continue to hover at record lows this fall.
  • The 30-year fixed remained unchanged but rates for 15-year fixed-rate loans, FHA loans, and Jumbo lows all fell to new MBA survey lows.
  • The drop spurred an uptick in demand for refinances.
  • Purchase activity fell for the 5th time in 6-weeks, however, but was still over 25% higher than a year ago.
  • 2020 continues to overall be a strong year for the housing market.

For the week ahead

It’s a quieter 1st half of the week on the U.S economic calendar.

Key stats include JOLTs job openings for September, which will garner some interest as the markets monitor the labor market recovery.

Nonfarm payroll and unemployment numbers for October were relatively upbeat last Friday. The weekly jobless claims figures continued to disappoint, however.

Away from the economic calendar, the markets will also continue to monitor chatter from Capitol Hill and COVID-19 news.

U.S Mortgage Rates Hold Steady Ahead of Next Week’s Presidential Election

Mortgage rates avoided a fall to yet another all-time low in the week ending 29th October. Following a 1 basis point fall in the week prior, the 30-year fixed rate rose by 1 basis point to 2.81%.

Compared to this time last year, 30-year fixed rates were down by 97 basis points.

30-year fixed rates were also down by 213 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side in the 1st half of the week.

Key stats included durable goods and core durable goods orders for September and October consumer confidence figures.

It was a mixed bag on the data front.

While both durable goods and core durable goods orders rose in September, consumer confidence softened in October.

The stats had a muted impact on the broader market, however, with a surge in new COVID-19 cases weighing on risk appetite.

With a number of EU member states reintroducing lockdown measures, the fear is that the U.S may have to follow.

On the geopolitical risk front, market jitters ahead of the U.S Presidential Election next week also weighed on riskier assets.

Freddie Mac Rates

The weekly average rates for new mortgages as of 29th October were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 1 basis points to 2.81% in the week. Rates were down from 3.75% from a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 15-year fixed rates fell by 1 basis points to 2.32% in the week. Rates were down from 3.19% compared with a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates increased by 1 basis points to 2.88% in the week. Rates were down by 55 points from last year’s 3.43%. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • The record-low mortgage rate environment is providing tangible support to the economy at a critical time.
  • Strong purchase demand is helping to lift the construction, manufacturing, and transportation industries.
  • Homeowners, looking to sell or make home improvements, are also supporting consumption
  • On the refinance front, many consumers are smartly taking advantage of the ability to lower their monthly payments. This means that homeowners can spend, save, or pay down debt more so than in the past.

Mortgage Bankers’ Association Rates

For the week ending 23rd October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from 3.12% to 3.14%. Points remained unchanged 0.35 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.02% to 3.00%. Points fell from 0.36 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.33% to 3.28%. Points increased from 0.30 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, increased by 1.7% in the week ending 23rd October. In the week prior, the index had slipped by 0.6%.

The Refinance Index increased by 3% and was 80% higher than the same week a year ago. In the week prior, the index had risen by 0.2%.

The refinance share of mortgage activity increased from 66.1% to 66.7%. In the previous week, the share had risen from 65.6% to 66.1%.

According to the MBA,

  • While mortgage rates were flat compared to the week prior, overall activity remains strong this fall.
  • Applications jumped 24% compared to last year, with the average loan size reaching a record-high of $372,600.
  • Housing inventory shortages have pushed national house prices considerably higher on an annual basis.
  • Refinance activity has been on the more volatile side in the past few months.

For the week ahead

It’s a busier 1st half of the week on the U.S economic calendar.

Key stats include the market’s preferred ISM Manufacturing and Non-Manufacturing PMIs and ADP nonfarm employment change figures.

Factory orders are also in focus but will likely be overshadowed by the private sector PMIs and labor market numbers.

The main event, in the 1st half of the week, is the U.S Presidential Election, however.

Expect plenty of market volatility that will influence U.S Treasury yields and ultimately mortgage rates.

With the election the key driver, COVID-19 updates will also provide direction. Any suggestions of a reintroduction of lockdown measures across badly affected U.S states would further test risk appetite.

U.S Mortgage Rates Fall to Yet another All-time Low

Mortgage rates slipped to yet another all-time low in the week ending 22nd October. Following a 6 basis point fall in the week prior, the 30-year fixed rate fell by 1 basis point to 2.80%.

Compared to this time last year, 30-year fixed rates were down by 95 basis points.

30-year fixed rates were down by 214 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side in the 1st half of the week.

Stats were limited to housing sector data for September, which was skewed to the positive in the week.

Building permits jumped by 5.2%, reversing a 0.5% fall in August, with housing starts rising by 1.9%. In August, housing starts had slumped by 6.7%.

From the week prior, stats were also skewed to the positive, supporting U.S Treasury yields.

Concerns over labor market conditions lingered, however, with initial jobless claims rising to 898k in the week ending 9th October.

From China, 3rd quarter GDP figures, retail sales, industrial production, and unemployment figures were also in focus.

The stats were skewed to the positive, with China’s economic recovery continuing through the 3rd quarter.

Away from the economic calendar, however, a failure to deliver a U.S stimulus bill and surge in new COVID0-19 cases weighed on yields in the week.

As a result of the surge in new COVID-19 cases across Europe, containment measures raise further uncertainty over the economic outlook.

Freddie Mac Rates

The weekly average rates for new mortgages as of 22nd October were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 1 basis points to 2.80% in the week. Rates were down from 3.75% from a year ago. The average fee remained unchanged at 0.6 points.
  • 15-year fixed rates fell by 2 basis points to 2.33% in the week. Rates were down from 3.18% compared with a year ago. The average fee rose from 0.5 points to 0.6 points.
  • 5-year fixed rates declined by 3 basis points to 2.87% in the week. Rates were down by 53 points from last year’s 3.40%. The average fee increased from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Mortgage rates remain very low, providing an opportunity for homebuyers who have not already taken advantage of the low mortgage rate environment.
  • Rates today are on average more than a full percentage point lower than rates over the last 5-years

Mortgage Bankers’ Association Rates

For the week ending 16th October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.12% for a 2nd consecutive week. Points also remained unchanged 0.35 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.00% to 3.02%. Points rose from 0.32 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.30% to 3.33%. Points decreased 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, slipped by 0.6% in the week ending 16th October. In the week prior, the index had decreased by 0.7%.

The Refinance Index rose by 0.2% from the previous week and was 74 percent higher than the same week a year ago. In the week prior, the index had slipped by 0.3%.

The refinance share of mortgage activity increased from 65.6% to 66.1%. In the week prior, the index had risen from 65.4% to 65.6%.

According to the MBA,

  • Mortgage rates rose to the highest since late September.
  • Despite the uptick in rates, refinance activity held steady, with FHA refinance applications posting a 17.6% increase.
  • Homebuyer demand remains strong this fall, while purchase applications fell by 2%.
  • With the ongoing housing sector recovery and low rate environment, both purchase and refinance applications remained robust compared with a year ago.
  • Refinance applications were up 74%, with purchase applications up 26% from a year ago.

For the week ahead

It’s a busier 1st half of the week on the U.S economic calendar.

Key stats include September durable and core durable goods orders and October consumer confidence figures.

While the stats will provide direction in the week, U.S politics and COVID-19 will also influence throughout the week.

Any updates from Capitol Hill and U.S election polls will provide direction. A further surge in new COVID-19 cases, however, would likely raise further concerns over the economic recovery.

U.S Mortgage Rates Slide to another All-Time Low

Mortgage rates fell to another all-time low in the week ending 15th October. Following a 1 basis point fall in the week prior, the 30-year fixed rate fell by 6 basis points to 2.81%.

Compared to this time last year, 30-year fixed rates were down by 88 basis points.

30-year fixed rates were also down by 213 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the lighter side in the 1st half of the week.

Key stats included September’s inflation figures ahead of the jobless claims figures on Thursday.

Inflation held steady at the end of the 3rd quarter, with the annual core rate of inflation unchanged at 1.7%. Economists had forecast a pickup to 1.8%.

Consumer prices saw modest increases in the month of September, however. Core consumer prices and consumer prices increased by just 0.2% following 0.4% increases in August.

Wholesale prices saw a pickup. The producer price index rose by 0.4% in September, following a 0.3% increase in August. Core wholesale prices also rose by 0.4%, following a 0.4% increase from the month prior.

While the stats were mixed, a lack of progress towards a stimulus Bill on Capitol Hill and COVID-19 weighed on Treasury yields.

Freddie Mac Rates

The weekly average rates for new mortgages as of 15th October were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 6 basis points to 2.81% in the week. Rates were down from 3.69% a year ago. The average fee fell from 0.8 points to 0.6 points.
  • 15-year fixed rates fell by 2 basis points to 2.35% in the week. Rates were down from 3.15% a year ago. The average fee fell from 0.7 points to 0.5 points.
  • 5-year fixed rates rose by 1 basis point to 2.90% in the week. Rates were down by 45 points from last year’s 3.35%. The average fee also remained unchanged at 0.2 points.

According to Freddie Mac,

  • Many people are benefitting from a 10th record low this year, with refinance activity remaining strong.
  • It is worth noting, however, that not all people are able to take advantage of low rates given the effects of the pandemic.

Mortgage Bankers’ Association Rates

For the week ending 9th October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.12%. Points increased from 0.32 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.01% to 3.00%. Points fell from 0.37 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.31% to 3.30%. Points increased from 0.30 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 0.7% in the week ending 9th October. In the week prior, the index had increased by 4.6%.

The Refinance Index slipped by 0.3% and was 44% higher than the same week a year ago. In the week prior, the index had jumped by 8%.

The refinance share of mortgage activity increased from 65.4% to 65.6%. In the week prior, the share had risen from 63.3% to 65.4%.

According to the MBA,

  • Mortgage applications for refinances and home purchases both decreased slightly despite 30-year fixed rates falling to a new MBA survey low.
  • Applications for government mortgages offset some of the overall declines by increasing 3%.
  • Refinance and purchase activity continues to run well ahead of last year’s pace, fueled by record-low rates and strong homebuyer demand.
  • House supply is a challenge for many aspiring buyers. Buying activity should continue to stay strong for the rest of the year, however.

For the week ahead

It’s a quiet 1st half of the week on the U.S economic calendar.

Key stats include September building permits and housing start figures from the U.S.

We would expect the numbers to have a muted impact on U.S Treasury yields, however.

Economic data from late last week will be a test in the early part of the week. Disappointing weekly jobless claims was yet another red flag.

From elsewhere, 3rd quarter GDP numbers out of China will set the tone at the start of the week.

While we can expect the stats to influence yields, the focus will remain on Capitol Hill and the Presidential Election race. The final live televised presidential debate on Wednesday will garner plenty of attention.

Expect COVID-19 news to also influence. A continued rise in new COVID-19 cases will test market risk appetite that could deliver another record low for mortgage rates.

U.S Mortgage Rates Hold Steady as Trump and U.S Politics Take Center Stage

Mortgage rates were relatively flat in the week ending 8th October. Following a 2 basis points fall in the week prior, the 30-year fixed rate fell by 1 basis point to 2.87%.

Compared to this time last year, 30-year fixed rates were down by 70 basis points.

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

Economic Data and Events from the Week

Economic data was on the lighter side in the 1st half of the week.

Key stats included September’s ISM Non-Manufacturing PMI and August’s JOLTs job openings were in focus.

While service sector activity picked up in September, labor market indicators raised red flags once more.

In the week prior, the weekly jobless claims and nonfarm payroll figures had disappointed. A fall in job openings was also negative ahead of the weekly jobless claims figures for the week ending 2nd October.

Away from the economic calendar, however, U.S politics continued to steal the show.

Trump’s release from the hospital after being diagnosed with COVID-19 was market risk positive. A decision to postpone any further negotiations on the COVID-19 relief bill was market risk negative, however.

On the U.S Presidential Election front, the Vice Presidential debate had limited impact on the markets. Biden’s lead over Trump began to support riskier assets, however. A Democratic clean sweep is expected to deliver further stimulus to support the economy. The markets appear to be willing to accept a repeal of Trump’s tax bills…

Freddie Mac Rates

The weekly average rates for new mortgages as of 8th October were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 1 basis point to 2.87% in the week. Rates were down from 3.57% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates rose by 1 basis point to 2.37% in the week. Rates were down from 3.05% compared with a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates slipped by 1 basis point to 2.89% in the week. Rates were down by 46 points from last year’s 3.35%. The average fee also remained unchanged at 0.2 points.

According to Freddie Mac,

  • The year-long slide in mortgage rates seems to be ending as rates have flattened over the last month.
  • As mortgage rates have flattened, the economic rebound has also slowed.
  • But with near record-low rates, buyer demand remains robust, with strong first-time buyers coming into the market.
  • The demand is particularly strong in more affordable regions of the country, such as the Midwest. Here, home prices are accelerating at the highest rate seen over the last two decades.

Mortgage Bankers’ Association Rates

For the week ending 2nd October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.15% to 3.12%. Points decreased from 0.43 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.05% to 3.01%. Points fell from 0.52 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.33% to 3.31%. Points decreased from 0.39 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 4.6% in the week ending 2nd October. In the week prior, the Index had declined by 4.8%.

The Refinance Index jumped by 8% from the week prior and was 50% higher than the same week a year ago. In the previous week, the index had fallen by 7%.

The refinance share of mortgage activity increased from 63.3% to 65.4%. In the week prior, the share had fallen from 64.3% to 63.3%.

According to the MBA,

  • Mortgage rates declined across the board last week – with most falling to record lows.
  • Borrowers responded, leading to the increase in the refinance index to its highest level since mid-August.
  • Continuing the trend seen in recent months, the purchase market is growing at a strong clip.
  • Last week, purchase activity was up by 21% from a year ago.

For the week ahead

It’s a relatively busy 1st half of the week on the U.S economic calendar.

Key stats include September inflation figures due out on Tuesday and Wednesday.

While we can expect the stats to influence yields, the focus will remain on Capitol Hill and the Presidential Election race.

The markets are continuing to hope for further stimulus support from Congress and then there’s the 15th October debate.

Last week, Trump announced that he would not take part in a virtual debate. Breaking the rules once more, the chances of Trump narrowing the gap on Biden are falling…

For the markets, while the repeal of Trump’s tax bill would be market negative, there are some positives to also consider.

From elsewhere, Brexit and economic data from China will also influence market risk sentiment in the week.

U.S Mortgage Rates Fall Back, with Trump’s Recovery Now a Key Driver

Mortgage rates were in decline in the week ending 1st October. Following a 3 basis point rise in the week prior, the 30-year fixed rate fell by 2 basis points to 2.88%.

Compared to this time last year, 30-year fixed rates were down by 77 basis points.

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

Economic Data from the Week

Economic data was on the heavier side in the 1st half of the week.

Key stats included September’s consumer confidence and ADP non-farm employment change figures. Finalized 4th quarter GDP numbers and Chicago’s PMI for September were also in focus ahead of a busy end to the week.

The CB Consumer Confidence Index jumped from 86.3 to 101.8 in September, with the ADP reporting a 749k rise in nonfarm.

Also positive was an upward revision to 2nd quarter GDP figures. In the 2nd quarter, the U.S economy contracted by 31.4%, revised up from a prelim 31.7%.

From the private sector, the Chicago PMI rose from 51.2 to 62.4, with housing sector data also impressing.

Pending home sales jumped by 8.8% in August, following a 5.9% rise in July.

From China, private sector PMIs also supported riskier assets and the optimistic outlook on the Chinese economy.

Away from the economic calendar, however, the 1st Presidential Debate weighed on riskier assets on Wednesday.

While the debate was market negative, progress on Capitol Hill towards a COVID-19 relief Bill was market risk positive.

Freddie Mac Rates

The weekly average rates for new mortgages as of 1st October were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 2 basis points to 2.88% in the week. Rates were down from 3.65% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 4 basis points to 2.36% in the week. Rates were down from 3.14% compared with a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates held steady at 2.90% in the week. Rates were down by 48 points from last year’s 3.38%. The average fee also remained unchanged at 0.2 points.

According to Freddie Mac,

  • The housing market has seen a strong, upward trajectory amid a very uncertain time. Mortgage rates sitting at sub-3% levels since July have supported the sector.
  • Potential buyers are seeing increased purchasing power, with existing homeowners able to refi at better rates.
  • Several factors could disrupt this activity, including higher home prices, lower inventories, and lender capacity.

Mortgage Bankers’ Association Rates

For the week ending 25th September, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.23% to 3.15%. Points increased from 0.37 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.10% to 3.05%. Points rose from 0.46 to 0.52 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.35% to 3.33%. Points decreased from 0.42 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, declined by 4.8% in the week ending 25th September. In the week prior, the Index had increased by 6.8%.

The Refinance Index slid by 7% from the week prior and was 52% higher than the same week a year ago. In the previous week, the Index had risen by 9%.

The refinance share of mortgage activity fell from 64.3% to 63.3%. In the week prior, the share had increased from 62.8% to 64.3%.

According to the MBA,

  • The 30-year fixed-rate mortgage fell by 5 basis points to 3.05% – the lowest in MBA’s survey.
  • In spite of declining rates, refinances fell by more than 6%, attributed to a 9% fall in conventional refinance applications.
  • There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans.
  • Many lenders are still operating at full capacity and working through operational challenges. This is limiting the number of applications that they are able to process.

For the week ahead

It’s a relatively busy 1st half of the week on the U.S economic calendar.

Key stats include September ISM Non-Manufacturing PMI figures and August’s JOLT’s job openings.

On Wednesday, the FOMC meeting minutes will also be in focus.

From the week prior, however, disappointing labor market numbers and U.S President Trump’s positive COVID-19 test will influence.

U.S Mortgage Rates Rise. In the Week Ahead, Geopolitics and Stats Will Influence

Mortgage rates were on the rise in the week ending 24th September. Following a 1 basis point rise in the week prior, the 30-year fixed rose by 3 basis points to 2.90%.

Compared to this time last year, 30-year fixed rates were down by 74 basis points.

30-year fixed rates were down by 204 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the quieter side in the 1st half of the week.

Key stats included September’s prelim private sector PMI and the weekly jobless claims figures.

It was a mixed set of numbers, with service sector growth slowing, while manufacturing sector activity picked up.

The stalling in the economic recovery was of greater concern in the week, though the PMI decline was marginal.

On Thursday, the weekly jobless claims also disappointed. In the week ending 18th September, initial jobless claims stood at 870K, up from 866k from the week prior.

While the numbers were not horrific, an upward trend in claims was of concern.

Housing sector data in the week also drew attention. In August, existing-home sales rose by 2.4%, with new home sales rising by 4.8%.

On the monetary policy from, FED Chair Powell delivered testimony on Capitol Hill in the week. Powell failed to hit mortgage rates. News of a spike in new COVID-19 cases also failed to pin mortgage rates back.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 3 basis points to 2.90% in the week. Rates were down from 3.64% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates rose by 5 basis points to 2.40% in the week. Rates were down from 3.16% compared with a year ago. The average fee decreased from 0.8 points to 0.7 points.
  • 5-year fixed rates fell by 6 basis points to 2.90% in the week. Rates were down by 48 points from last year’s 3.38%. The average fee declined from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage rates set several record lows over the last few months and have remained low into September.
  • While there is room for rates to decrease further, higher home prices and low inventory could possibly stifle the high demand.

Mortgage Bankers’ Association Rates

For the week ending 18th September, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from 3.16% to 3.23%. Points increased from 0.35 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.07% to 3.10%. Points rose from 0.32 to 0.46 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.41% to 3.35%. Points increased from 0.27 to 0.42 (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 6.8% in the week ending 18th September. In the week prior, the Index had fallen by 2.5%.

The Refinance Index rose by 9% from the previous week and was 25% higher 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 62.8% to 64.3%. In the week prior, the share had slipped from 63.1% to 62.8%.

According to the MBA,

  • Mortgage application activity remained strong last week, even as the 30-year fixed-rate mortgage and 15-year fixed-rate mortgage increased to their highest level since late August.
  • Purchase applications were up over 25% from a year ago.
  • Demand for higher-balance loans pushed the average purchase loan size to another record high.
  • The strong interest in homebuying observed in the summer has carried over to the fall.
  • Despite the uptick in rates, refinance applications increased by around 9% and were almost 86% higher than last year.

For the week ahead

It’s a busy 1st half of the week on the U.S economic calendar.

Key stats include September consumer confidence, ADP nonfarm employment change, and finalized 3rd quarter GDP numbers.

Barring deviation from prelims, expect the consumer confidence and ADP numbers to have the greatest impact.

On the monetary policy front, FOMC members are out in force during the week. Expect the markets to digest and respond to the chatter.

If that’s not enough, there’s the first U.S Presidential Election debate on Wednesday. With Biden holding a solid lead, it remains his to lose…

From elsewhere, stats from the Eurozone and China and COVID-19 updates and Brexit chatter will also influence.

U.S Mortgage Rates Hold Steady thanks to the Dovish FED

Mortgage rates were mixed in the week ending 17th September. Following a tumble to a new record low, 30-year fixed rose by 1 basis point to 2.87%. In the week prior, the 30-year fixed had fallen by 7 basis points to 2.86%.

Compared to this time last year, 30-year fixed rates were down by 86 basis points.

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

Economic Data from the Week

Economic data was on the busier side in the 1st half of the week.

Key stats included August industrial production and retail sales figures and September NY Empire State Manufacturing Index numbers.

It was a mixed bag on the economic data front. While retail sales and industrial production saw further upside, both fell short of forecasts.

A pickup in NY State manufacturing sector activity was the only positive.

The stats had a limited impact on the yields, however. It was the FED’s monetary policy decision, projections, and Powell press conference that pinned back yields.

A particularly dovish outlook on interest rates weighed on U.S Treasury yields on Wednesday, pinning mortgage rates back.

Based on the FOMC projections, the FED sees interest rates holding at close to 0% until 2023. The markets had not anticipated such an accommodative stance by the FED. Ultimately, it was a reflection of the concerns over the economic outlook.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 1 basis points to 2.87% in the week. Rates were down from 3.73% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 2 basis points to 2.35% in the week. Rates were down from 3.21% compared with a year ago. The average fee increased from 0.7 points to 0.8 points.
  • 5-year fixed rates slid by 15 basis points to 2.96% in the week. Rates were down by 53 points from last year’s 3.49%. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • In spite of the recession, low mortgage rates continued to draw first-time buyers into the real estate market.
  • In August, first-time buyer activity jumped by 19% from July to the highest monthly level ever for Freddie Mac.

Mortgage Bankers’ Association Rates

For the week ending 11th September, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.16%. Points decreased from 0.42 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.07%. Points declined from 0.36 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.40% to 3.41%. Points decreased from 0.31 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, fell by 2.5% in the week ending 11th September. In the week prior, the Index had increased by 2.9%.

The Refinance Index declined by 4% from the previous week and was 30% higher than the same week a year ago. In the previous week, the index had increased by 3%.

The refinance share of mortgage activity slipped from 63.1% to 62.8%. In the week prior, the share had increased from 62.5% to 63.1%.

According to the MBA,

  • Mortgage rates held steady and have now hovered near the 3% mark for the past 2-months.
  • While conventional refinances saw a decline, overall activity was still 30% higher than a year ago.
  • Following the flurry of refinancing activity in recent months, demand may wane as borrowers look for another sizeable drop.
  • Last week, applications to buy a home fell, while the underlying trends remain strong.
  • Purchase activity has outpaced year-ago levels for 17-consecutive weeks.

For the week ahead

It’s a quieter 1st half of the week on the U.S economic calendar.

Key stats include September’s prelim private sector PMIs due out on Wednesday.

We would expect plenty of sensitivity to the numbers following the FED dovish outlook on monetary policy and the economic recovery.

Away from the economic calendar, geopolitics and COVID-19 will also be in focus. The markets will need to track chatter from Beijing and Washington and on Brexit.

Last week’s COVID-19 spikes will also be an issue should there be further spikes across the U.S, the EU, and other parts of the world.

U.S Mortgage Rates Slide to Another Record Low Ahead of This Week’s FOMC

Mortgage rates hit reverse once more in the week ending 10th September.

30-year fixed rates slid by 7 basis points to a new low 2.86%, reversing a 2 basis point rise to 2.93% in the week prior.

Compared to this time last year, 30-year fixed rates were down by 70 basis points.

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

Economic Data from the Week

Economic data was on the quieter side in the 1st half of the week.

Key stats included July’s JOLT’s job openings, inflation, and the weekly jobless claims figures.

It was a mixed bag from the U.S. While inflation and job openings were skewed to the positive, the jobless claims disappointed.

Wholesale inflation came in ahead of forecasts,  though inflationary pressures softened in August. By contrast, the core annual rate of inflation picked up from 1.6% to 1.7% in the month.

In the week ending 4th September, initial jobless claims stood at 884k, which was worse than a forecasted 446k. In the week prior, however, claims had also come in at 884k.

While the stats were mixed, a continued slide in U.S tech stocks weighed on Treasury yields, sending mortgage rates south.

Freddie Mac Rates

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

  • 30-year fixed rates decreased by 7 basis points to 2.86% in the week. Rates were down from 3.56% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 5 basis points to 2.37% in the week. Rates were down from 3.09% compared with a year ago. The average fee decreased from 0.8 points to 0.7 points.
  • 5-year fixed rates jumped by 18 basis points to 3.11% in the week. Rates were down by 25 points from last year’s 3.36%. The average fee remained unchanged at 0.2 points.

According to Freddie Mac,

  • Mortgage rates have hit another record low. This was attributed to a late-summer slowdown in economic recovery.
  • These low rates have ignited robust purchase demand activity, which is up 25% from a year ago.
  • Additionally, purchase demand activity has been growing at double-digit growth rates for 4 months in a row.
  • However, heading into the fall, it will be difficult to sustain the growth momentum in purchases due to the lack of supply.
  • This lack of supply is already reining back sales activity.

Mortgage Bankers’ Association Rates

For the week ending 4th September, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.19% to 3.16%. Points increased from 0.34 to 0.42 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.08% to 3.07%. Points remained unchanged at 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.41% to 3.40%. Points decreased from 0.41 to 0.40 (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 2.9% in the week ending 4th September. In the week prior, the index had decreased by 2%.

The Refinance Index increased by 3% and was 60% higher than the same week a year ago. In the previous week, the index had fallen by 3%.

The refinance share of mortgage activity increased from 62.5% to 63.1%. In the week prior, the share had slipped from 62.6% to 62.5%.

According to the MBA,

  • Mortgage rates were in decline, with a noteworthy 5-basis point fall in the 15-year fixed-rate delivering a record low 2.62%.
  • The drop in rates led to a rebound in refinancing activity, driven by borrowers applying for conventional loans.
  • Purchase applications were 40% higher than the same week a year ago. The increase was skewed higher by being compared to Labor Day 2019.

For the week ahead

It’s a busy 1st half of the week on the U.S economic calendar.

Key stats include August industrial production and retail sales figures, together with the weekly jobless claims numbers.

NY Empire State and Philly FED manufacturing numbers for September are also due out and will influence.

From elsewhere, industrial production and retail sales figures from China will also influence market risk sentiment.

The key driver for the week, however, will be the FOMC interest rate decision and FOMC projections…

On the geopolitical front, there’s also Brexit and U.S-China relations to monitor.

U.S Mortgage Rates Steady ahead of the Tech Sector Sell-off…

Mortgage rates steadied in the week ending 3rd September, following the previous week’s 8 basis point fall, delivering a 3rd rise in 4-weeks.

30-year fixed rates rose by 2 basis points to 2.93%, partially reversing an 8 basis point fall to 2.91% in the week prior.

Compared to this time last year, 30-year fixed rates were down by 56 basis points.

30-year fixed rates were also down by 201 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

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

Key stats included August’s private sector PMIs and ADP nonfarm employment change figures, together with the weekly jobless claims.

It was a mixed bag for the week, in spite of the uptick in mortgage rates.

Looking at the ISM private PMIs, manufacturing sector growth picked up in August, with the pace of job shedding easing.

By contrast, the all-important ISM Non-Manufacturing PMI fell from 58.1 to 56.9. While the decline was not an alarming one, it reflected a speed bump in the COVID-19 recovery nonetheless.

Looking at the labor market numbers, it was also a mixed bag ahead of Friday’s official labor market numbers.

According to the ADP, nonfarm employment rose by 428k in August, coming up short of a forecasted 950k rise. In July, 1,011k jobs had been added.

By contrast, the weekly jobless claims provided some comfort. In the week ending 28th August, initial jobless claims stood at 881k. This was down considerably from the previous week’s 1,011k.

All in all, a jump in the U.S equity markets in the early part of the week to fresh record highs drove rates northwards.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 2 basis points to 2.93% in the week. Rates were down from 3.49% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 4 basis points to 2.42% in the week. Rates were down from 3.00% compared with a year ago. The average fee increased from 0.7 points to 0.8 points.
  • 5-year fixed rates increased by 2 basis points to 2.93% in the week. Rates were down by 37 points from last year’s 3.30%. The average fee remained unchanged at 0.2 points.

According to Freddie Mac,

  • Mortgage rates have remained flat or at near-record lows for the last month.
  • However, there are some interesting compositional shifts as the 10-year Treasury rate increased modestly, while mortgage rates declined.
  • Spreads may decline even further. The rise in Treasury rates will make it difficult for mortgage rates to fall much more over the next few weeks, however.

Mortgage Bankers’ Association Rates

For the week ending 28th August, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from 3.16% to 3.19%. Points increased from 0.29 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.11% to 3.08%. Points fell from 0.38 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances remained unchanged for a 2nd week at 3.41. Points increased from 0.35 to 0.38 (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% in the week ending 28th August. In the week prior, the index had fallen by 6.5%.

The Refinance Index fell by 3% from the previous week and was 40% higher than the same week a year ago. In the week prior, the index had slid by 10%.

The refinance share of mortgage activity decreased from 62.6% to 62.5% in the week ending 28th August. In the week prior, the share had declined from 64.6% to 62.6%.

According to the MBA,

  • Both conventional and government refinancing activity decreased last week. This was despite 30-year fixed and 15-year fixed mortgage rates falling to near historical lows.
  • Mortgage rates have remained below 3.5% for 5-months now, and it’s possible that refinance demand is slowing. There may not be another significant rise in demand without another material fall in mortgage rates.
  • Purchase applications were unchanged over the week and were 28% higher than a year ago. It was the 15th straight week of year-over-year increases.
  • Lenders are reporting that strong demand for home buying is coming from a delayed activity from the spring. Households are also reportedly seeking more space in less densely populated areas.

For the week ahead

It’s a relatively quiet 1st half of the week on the U.S economic calendar.

Key stats include August’s inflation and the JOLTs job opening numbers along with the weekly jobless claims figures.

With the U.S on holiday on Monday, expect any chatter from Washington to also influence.

Away from the U.S, trade data from China will also provide rates with direction in the week…

U.S Mortgage Rates Hit Reverse. Record Low Rates Continue to Drive Buyer Demand

Mortgage rates hit reverse in the week ending 27th August to end a run of 2 consecutively weekly rises.

30-year fixed rates fell by 8 basis points to 2.91%, reversing a 3 basis point rise from the week prior.

Compared to this time last year, 30-year fixed rates were down by 67 basis points.

30-year fixed rates were also down by 203 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the busier side through the 1st half of the week.

Key stats included consumer confidence, durable goods orders, and the weekly jobless claims figures.

While durable goods and core durable goods orders jumped in July, consumer confidence made an unexpected fall.

With labor market conditions continuing to deliver plenty of uncertainty, initial jobless claims came in at 1.006m in the week ending 21st August.

The only positive in the week was the durable goods orders. While the stats did influence, there was plenty of apprehension ahead of FED Chair Powell’s speech from Jackson Hole on Thursday.

A change to the FED’s monetary policy framework hit U.S Treasury yields and the Dollar.

Geopolitics and COVID-19 news updates also delivered some uncertainty. While the U.S and China trade talks delivered positive news, fresh spikes in new COVID-19 cases in the EU were negative.

For now, however, hopes of a COVID-19 vaccine continue to limit the impact of the COVID-19 numbers on market risk sentiment.

Freddie Mac Rates

The weekly average rates for new mortgages as of 27th August were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 8 basis points to 2.91% in the week. Rates were down from 3.58% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 8 basis points to 2.46% in the week. Rates were down from 3.06% compared with a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates remained unchanged at 2.91% in the week. Rates were down by 40 points from last year’s 3.31%. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage rates remain at record lows as uncertainty lingers.
  • Lower rates continue to incentivize potential buyers.
  • The home-buying season, which shifted from spring to summer, will likely continue into the fall.

Mortgage Bankers’ Association Rates

For the week ending 21st August, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.16%. Points increased from 0.27 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.13% to 3.11%. Points fell rose 0.36 to 0.38 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances remained unchanged at 3.41. Points also remained unchanged at 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, slid by 6.5% in the week ending 21st August. In the week prior, the index had decreased by 3.3%.

The Refinance Index slid by 10% from the previous week and was 34% higher than the same week a year ago. In the week prior, the index had fallen by 5%.

The refinance share of mortgage activity declined from 64.6% to 62.6% in the week ending 21st August. In the week prior, the share had fallen from 65.7% to 64.6%.

According to the MBA,

  • Despite the lower rates, conventional refinance applications fell by 11% and government refinance applications by 6%.
  • The combined declines left the total refinance index at its lowest level since July.
  • While refinances were on the slide, the home purchase market remains a bright spot for the overall economy.
  • Purchase applications were essentially unchanged but were 33% higher than a year ago. This marked the 14th straight week of year-on-year gains.
  • Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.

For the week ahead

It’s a relatively busy 1st half of the week on the U.S economic calendar.

Key stats include August’s ISM private sector PMIs, ADP nonfarm employment change, and the weekly jobless claims figures.

Expect plenty of influence from the stats. The markets will be looking for a combination of improved private sector conditions and a slide in jobless claims.

On the geopolitical risk front, any chatter from Beijing and the Oval Office will also have an impact on yields.