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 Surge After a Steady 3-Weeks

Mortgage rates were on the move in the 2nd week of February, after barely shifting for 3 consecutive weeks.

In the week ending 10th February, 30-year fixed rates jumped by 14 basis points to 3.69%. 30-year fixed rates had remained unchanged at 3.55% in the week prior. As a result, 30-year fixed rates held above the 3% mark for a 13th consecutive week.

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

30-year fixed rates were still down by 125 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a quiet first half of the week, with economic data limited to December trade data. The numbers had a muted impact on U.S Treasury yields ahead of inflation figures on Thursday. January nonfarm payrolls from the previous week supported the rise in mortgage rates in the week.

Freddie Mac Rates

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

  • 30-year fixed rates jumped by 14 basis points to 3.69% in the week. This time last year, rates had stood at 2.73%. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates surged by 16 basis points to 2.93% in the week. Rates were up by 74 basis points from 2.19% a year ago. The average fee rose from 0.7 points to 0.8 points.
  • 5-year fixed rates increased by 9 basis point to 2.80%. Rates were up by 1 basis point from 2.79% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Economy normalization continues, with mortgage rates surging to the highest level since the start of the COVID-19 pandemic.
  • Freddie Mac expects rate increases to continue due to high inflation and strong labor market conditions.
  • The combination will likely have an adverse impact on homebuyer demand.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.78% to 3.83%. Points decreased from 0.41 to 0.40 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.86% to 3.93%. Points decreased from 0.55 to 0.54 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.59% to 3.62%. Points rose from 0.31 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, slid by 8.1% in the week ending 4th February. The Index had jumped by 12% in the previous week.

The Refinance Index slid by 7% from the previous week and was 52% lower than the same week a year ago. In the week prior, the Index had surged by 18%.

The refinance share of mortgage activity decreased from 57.3% to 56.2%. In the previous week, the share had increased from 55.8% to 57.3%.

According to the MBA,

  • Mortgage rates continued to move higher, tracking the 10-year yield, as the markets responded to growing inflationary pressures.
  • The FED and other key global central banks signaled that they will start removing accommodative policies, driving yields higher.
  • Purchase activity slowed, while the average loan size hit another record high at $446,000.

For the week ahead

It’s a busier start to the week for the U.S markets. Wholesale inflation figures will be in focus early in the week ahead of retail sales data on Wednesday. Expect last week’s U.S inflation figures and this week’s stats to provide mortgage rates with further direction.

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.

U.S Mortgage Rates Hold Steady after the Recent Jump

Mortgage rates were mixed in the final week of January.

In the week ending 27th January, 30-year fixed rates slipped by 1 basis point to 3.55%. 30-year fixed rates had risen by 11 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for an 11th 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

Early in the week, economic data took a back seat, in spite of weak private sector PMI and consumer sentiment figures.

On Wednesday, the FOMC rate statement and press conference was the main event. A more hawkish than anticipated FED Chair, who failed to downplay monthly rate hikes, spooked the markets.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 1 basis point to 3.55% in the week. This time last year, rates had stood at 2.73%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 1 basis point to 2.80% in the week. Rates were up by 60 basis points from 2.20% a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates increased by 10 basis points to 2.70%. Rates were down by 10 basis points from 2.80% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Recent rate increases have yet to significantly impact purchase demand.
  • In the past, potential homebuyers who are on the fence tend to enter the market at the start of a rate increase cycle.
  • Rates are likely to continue to rise but at a more gradual pace.
  • As a result, current homebuyers could continue to benefit from refinancing.

Mortgage Bankers’ Association Rates

For the week ending 21st January, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.64% to 3.72%. Points decreased from 0.45 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.64% to 3.69%. Points increased from 0.44 to 0.61 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.54% to 3.56%. Points fell from 0.47 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, slid by 7.1% in the week ending 21st January. The Index had increased by 2.3% in the week prior.

The Refinance Index slid by 13% and was 53% lower than the same week one year earlier. In the previous week, the Index had fallen by 3%.

The refinance share of mortgage activity decreased from 60.3% to 55.8%. In the previous week, the share had declined from 64.1% to 60.3%.

According to the MBA,

  • 30-year fixed rates increased for a 5th consecutive week to its highest level since March 2020.
  • Borrower demand for refinances has fallen as a result, with applications down for a 4th week in a row.
  • The average purchase loan size hit a new record high $433,500.

For the week ahead

It’s a busy start to the week for the U.S markets. ISM Manufacturing PMI and JOLT’s job openings will be in focus on Tuesday. On Wednesday, ADP nonfarm employment change figure will be the key stat of the week, however.

On the monetary policy front, expect any FOMC member chatter to also influence. Away from the economic calendar, chatter from the U.S and Russia will also be an area of focus.

U.S Mortgage Rates Rise in Response to U.S Treasury Yield Gains

Mortgage rates were on the rise once more in the third week of the year.

In the week ending 20th January, 30-year fixed rates rose by 11 basis points to 3.56%. 30-year fixed rates had surged by 23 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for a 10th consecutive week.

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

30-year fixed rates were still down by 138 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

Economic data was on the quieter side in the first half of the week. Stats were limited to NY Empire State Manufacturing numbers and housing sector data.

In spite of a mixed set of numbers, the markets brushed aside the stats. Market angst over FED monetary policy to curb inflation weighed on riskier assets in the week.

Expectations of 4 rate hikes drove U.S Treasury yields and U.S mortgage rates higher.

Freddie Mac Rates

The weekly average rates for new mortgages as of 20th January were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 11 basis points to 3.56% in the week. This time last year, rates had stood at 2.79%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 17 basis points to 2.79% in the week. Rates were up by 56 basis points from 2.23% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates increased by 3 basis points to 2.60%. Rates were down by 52 basis points from 3.12% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates rose once more as the 10-year U.S Treasury yield rose and financial markets adjusted to anticipated changes in monetary policy that will combat inflation.
  • Purchase demand weakened as a result of the upward trend in mortgage rates.
  • Supply remains near historically tight levels, however, with home prices remaining elevated. This continues to keep the market competitive.

Mortgage Bankers’ Association Rates

For the week ending 14th January, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.52% to 3.64%. Points remained unchanged at 0.45 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.50% to 3.64%. Points decreased from 0.45 to 0.44 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.42% to 3.54%. Points rose from 0.36 to 0.47 (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 2.3% in the week ending 14th January. The index had increased 1.4% in the previous week.

The Refinance Index slid by 3% and was 49% lower than the same week one year earlier. In the previous week, the index had slipped by 0.1%.

The refinance share of mortgage activity decreased from 64.1% to 60.3% in the week ending 14th January. In the previous week, the share had fallen from 65.4% to 64.1%.

According to the MBA,

  • Mortgage rates hit their highest levels since March 2020, leading to a marked slowdown in refinance activity.
  • Purchase applications jumped, however, with the average loan size for a purchase application hitting a record high $418,500.
  • A lack of housing inventory and rising home prices continue to push average loan sizes higher.

For the week ahead

It’s a busy start to the week for the U.S markets. Economic data includes prelim private sector PMIs for January and consumer confidence figures. On Wednesday, core durable goods orders will also draw interest.

The main event of the week, however, will be the FED’s policy decision and forward guidance on monetary policy.

U.S Mortgage Rates Surge in Response to U.S Inflation Figures for December

Mortgage rates were on the rise once more in the second week of 2022.

In the week ending 13th January, 30-year fixed rates surged by 23 basis points to 3.45%. 30-year fixed rates had risen by 11 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for an 9th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 80 basis points.

30-year fixed rates were still down by 149 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively quiet first half of the week on the U.S economic calendar. Key stats included December inflation figures on Wednesday.

In December, the U.S annual rate of inflation accelerated from 6.8% to 7.0%, the highest since 1982. The core annual rate of inflation picked up from 4.9% to 5.5%.

On the monetary policy front, FED Chair Powell had given testimony on Tuesday, delivering some market relief. The FED Chair talked of the U.S economy’s ability to withstand rate hikes while also holding back from suggesting the need for more than 3 hikes in the year.

The inflation figures ultimately drove yields northwards, however.

Freddie Mac Rates

The weekly average rates for new mortgages as of 13th January were quoted by Freddie Mac to be:

  • 30-year fixed rates jumped by 23 basis points to 3.45% in the week. This time last year, rates had stood at 2.65%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 19 basis points to 2.62% in the week. Rates were up by 46 basis points from 2.16% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates increased by 16 basis points to 2.57%. Rates were down by 18 basis points from 2.75% a year ago. The average fee fell from 0.5 points to 0.3 points.

According to Freddie Mac,

  • All mortgage types saw rates rise, driven by the prospect of a faster than expected tightening of monetary policy.
  • The shift in sentiment was driven by a continued pickup in inflation exacerbated by uncertainty in labor and supply chains.
  • In spite of the rise in mortgage rates this year, purchase demand has yet to reflect the jump in rates.
  • Given the fast pace of home price growth, however, it will likely dampen demand in the near future.

Mortgage Bankers’ Association Rates

For the week ending 7th January, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.33% to 3.52%. Points decreased from 0.48 to 0.45 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.40% to 3.50%. Points increased from 0.42 to 0.45 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.31% to 3.42%. Points fell from 0.38 to 0.36 (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 1.4% from a week earlier. The Index had fallen by 2.7% from 2-weeks earlier.

The Refinance Index slipped by 0.1% in the week ending 7th January and was 50 basis points lower than the same week a year ago. The index had declined by 2% from 2-weeks ago. The refinance share of mortgage activity decreased from 65.4% to 64.1% in the week ending 7th January. The share had risen from 63.9% to 65.4% in the 2-weeks prior.

According to the MBA,

  • Mortgage rates increased significantly as the FED signaled tighter policy ahead, pushing yields higher.
  • 30-year fixed hit 3.52%, its highest level since March 2020.
  • Rates at these levels are quickly closing the door on refinance opportunities for many borrowers.
  • Applications remained at their lowest level in over a month.
  • The housing market started 2022 on a strong note. However, the strength in growth will be dependent upon a more rapid growth in housing inventory to meet demand.

For the week ahead

It’s a particularly quiet start to the week for the U.S markets. Economic data is limited to NY Empire State Manufacturing numbers that should have a muted impact on yields.

From elsewhere, 4th quarter GDP numbers from China will also draw interest on Monday, however.

Away from the economic calendar, expect COVID-19 news updates to remain a key area of focus.

U.S Mortgage Rates Hit the Highest Level Since May 2020

Mortgage rates were on the rise once more in the first week of 2022.

In the week ending 6th January, 30-year fixed rates increased by 11 basis points to 3.22%. 30-year fixed rates had risen by 6 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for an 8th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 55 basis points.

30-year fixed rates were still down by 172 basis points, however, since November 2018’s last peak of 4.94%.

Economic Data from the Week

It was a relatively busy first half of the week on the U.S economic calendar. Key stats included ISM Manufacturing PMI and finalized Markit survey private sector PMIs. On the labor market front, JOLT’s job openings and ADP nonfarm payrolls also drew interest.

The stats were skewed to the negative, with the private sector seeing slower growth in December. In spite of the fall in the PMIs, the numbers were not weak enough to raise any red flags.

JOLT’s job openings for November had also disappointed ahead of the ADP nonfarm employment change figures on Wednesday, which impressed.

In December, nonfarm payrolls jumped by 800,000 according to the ADP. Economists had forecast a more modest 400k rise.

While the stats drew plenty of interest, it was the FOMC meeting minutes that drive yields northwards. A more hawkish than anticipated set of minutes that pointed to a more aggressive removal of policy support drove mortgage rates northwards.

Freddie Mac Rates

The weekly average rates for new mortgages as of 6th January were quoted by Freddie Mac to be:

  • 30-year fixed rates increased by 11 basis points to 3.22% in the week. This time last year, rates had stood at 2.67%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 10 basis points to 2.43% in the week. Rates were up by 26 basis points from 2.17% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates remained unchanged at 2.41%. Rates were down by 30 basis points from 2.71% a year ago. The average fee remained unchanged at 0.5 points.

According to Freddie Mac,

  • Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are up more than half a percent since January 2021.
  • With higher inflation, promising economic growth, and a tight labor market, we expect that rates will continue to rise.
  • The impact of higher rates on purchase demand remains modest so far given the current first-time homebuyer growth.

Mortgage Bankers’ Association Rates

For the week ending 31st December, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances rose from 3.31% to 3.33%. Points increased from 0.38 to 0.48 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.39% to 3.40%. Points increased from 0.37 to 0.42 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.35% to 3.31%. Points rose from 0.34 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, declined by 2.7% from 2-weeks earlier. The Index had slipped by 0.6% in the week ending 17th December.

The Refinance Index declined by 2% from 2-weeks ago and was 40% lower than the same week one year ago. The index had risen by 2% in the week ending 17th December.

In the week ending 31st December, the refinance share of mortgage activity rose from 63.9% to 65.4%. The share had increased from 63.3% to 65.2% in the week ending 17th December.

According to the MBA,

  • Mortgage rates continued to creep higher over the past 2-weeks, as markets maintained an optimistic view of the economy.
  • The 30-year fixed rate increased by 6 basis points to its highest level since April 2021.
  • Higher rates at the end of 2021 caused refinance activity to decline. Refinance demand continues to dwindle as many borrowers refinanced in 2020 and in early 2021. At that time mortgage rates were around 40 basis points lower.
  • The purchase market also finished the year on a slower note. The final week was the weakest since October 2021.
  • While average loan sizes were lower, home price appreciation remains at very high levels.
  • Despite supply and affordability challenges, 2021 was a record year for purchase originations. MBA expects 2022 to be even stronger with total purchase activity reaching $1.74tn.

For the week ahead

It’s a quieter week ahead on the U.S economic data front. The markets will need to wait until Wednesday for December inflation figures that will be one of the key stats of the week.

Following the more hawkish than anticipated FOMC meeting minutes from last week, another pickup in inflationary pressure would likely be a green light for a March rate hike.

On the monetary policy front, FED Chair Powell is due to give testimony on Tuesday, which could also move the dial.

From elsewhere, inflation numbers from China will also draw interest on Wednesday.

Away from the economic calendar, expect COVID-19 news updates to remain a key driver, however.

U.S Mortgage Rates Rise as Omicron Fears Abate

Mortgage rates were back on the rise in the final week of 2021. News of the Omicron strain being milder and fewer reported hospital cases supported riskier assets in the week.

As at 30th December, 30-year fixed rates increased by 6 basis points to 3.11%. 30-year fixed rates had fallen by 7 basis points in the week prior. As a result, 30-year fixed rates held above the 3% mark for a 7th consecutive week.

Compared to this time last year, 30-year fixed rates were up by 44 basis points.

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

Economic Data from the Week

It was a quiet first half of the week on the U.S economic data front. Economic data was limited to trade and inventory data and housing sector numbers. The stats had a muted impact on yields, however.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 6 basis points to 3.11% in the week. This time last year, rates had stood at 2.67%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 3 basis points to 2.33% in the week. Rates were up by 16 basis points from 2.17% a year ago. The average fee held steady at 0.7 points.
  • 5-year fixed rates increased by 4 basis points to 2.41%. Rates were down by 30 basis points from 2.71% a year ago. The average fee increased from 0.4 points to 0.5 points.

According to Freddie Mac,

  • Mortgage rates have effectively been moving sideways despite the increase in new COVID cases.
  • This is because incoming data suggests that the economy remains on firm ground, particularly cyclical industries like manufacturing and housing.
  • Moreover, low interest rates and high asset valuations continue to drive consumer spending.
  • While we do expect rates to rise, the push of the first-time homebuyer demographic that’s been propelling the purchase market will continue in 2022 and beyond.

Mortgage Bankers’ Association Rates

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

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

  • Average interest rates for 30-year fixed with conforming loan balances fell from 3.30% to 3.27%. Points increased from 0.39 to 0.41 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.37% to 3.34%. Points increased from 0.34 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.32% to 3.31%. Points fell from 0.30 to 0.27 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, decreased by 0.6% in the week ending 17th December. The Index had fallen by 4.0% in the week prior.

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

For the week ahead

It’s a busy first half of the week on the economic data front. Key stats include private sector PMIs, JOLT’s job openings, and ADP nonfarm employment change figures.

On Wednesday, the FOMC meeting minutes will also garner plenty of attention.

From elsewhere, private sector PMIs from China and the Eurozone will also influence market risk sentiment in the week.

Away from the economic calendar, expect COVID-19 news updates to remain a key driver, however.