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

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

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

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

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

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

Economic Data from the Week

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

Softer inflation figures pegged back mortgage rates in the week.

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

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

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

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

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

Freddie Mac Rates

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

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

According to Freddie Mac,

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

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points decreased from 0.33 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.07% to 3.04%. Points fell from 0.30 to 0.27 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.14% to 3.13%. Points declined from 0.30 to 0.21 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased by 0.3% in the week ending 10th September. In the previous week, the index had declined by 1.9%

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

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

According to the MBA,

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

For the week ahead

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

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

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

U.S Mortgage Rates Hold Steady as Economic Uncertainty Lingers

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

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

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

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

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

Economic Data from the Week

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

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

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

Freddie Mac Rates

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

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

According to Freddie Mac,

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

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points decreased from 0.34 to 0.33 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.09% to 3.07%. Points rose from 0.25 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.13% to 3.14%. Points rose from 0.26 to 0.30 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, declined by 1.9% in the week ending 3rd September. In the previous week, the index had decreased by 2.4%.

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

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

According to the MBA,

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

For the week ahead

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

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

U.S Mortgage Rates Held Steady ahead of Nonfarm Payrolls

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

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

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

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

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

Economic Data from the Week

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

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

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

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

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

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

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

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

Freddie Mac Rates

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

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

According to Freddie Mac,

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

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at 3.03%. Points increased from 0.29 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.10% to 3.09%. Points declined from 0.29 to 0.25 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances remained unchanged at 3.13%. Points remained unchanged at 0.26 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, decreased by 2.4% in the week ending 27th August. In the previous week, the index had increased by 1.6%.

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

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

According to the MBA,

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

For the week ahead

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

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

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

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

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

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

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

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

Economic Data from the Week

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

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

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

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

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

Freddie Mac Rates

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

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

According to Freddie Mac,

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

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.06% to 3.03. Points decreased from 0.34 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.15% to 3.10%. Points declined from 0.31 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.19% to 3.13%. Points remained unchanged at 0.26 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased by 1.6% in the week ending 20th August. In the week prior, the index had decreased 3.9%.

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

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

According to the MBA,

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

For the week ahead

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

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

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

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

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

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

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

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

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

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

Economic Data from the Week

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

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

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

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

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

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

Freddie Mac Rates

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

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

According to Freddie Mac,

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

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances increased from 2.99% to 3.06. Points increased from 0.30 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.06% to 3.15%. Points rose from 0.27 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.15% to 3.19%. Points decreased from 0.29 to 0.26 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, decreased 3.9% in the week ending 13th August. In the week prior, the Index had increased by 2.8%.

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

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

According to the MBA,

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

For the week ahead

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

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

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

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

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

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

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

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

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

Economic Data from the Week

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

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

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

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

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

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

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

Freddie Mac Rates

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

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

According to Freddie Mac,

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

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances increased from 2.97% to 2.99%. Points decreased from 0.33 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.08% to 3.06%. Points fell from 0.29 to 0.27 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.12% to 3.15%. Points decreased from 0.30 to 0.29 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased by 2.8% in the week ending 6th August. In the week prior, the index had fallen by 1.7%.

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

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

According to the MBA,

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

For the week ahead

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

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

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

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

U.S Mortgage Rates Fall Once More as Concerns over COVID-19 Peg Back Yields

Mortgage rates resumed their downward trend, with rates falling for the 5th time in 6-weeks.

In the week ending 5th August, 30-year fixed rates fell by 3 basis points to 2.77%. Mortgage rates had risen by 2 basis points in the week prior.

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

Compared to this time last year, 30-year fixed rates were down by 11 basis points.

30-year fixed rates were still down by 217 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

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

Economic data included private sector PMI and nonfarm payroll figures for July.

It was a mixed bag on the economic data front.

While manufacturing sector growth slowed in July, service sector activity increased sharply at the start of the quarter.

The ISM Manufacturing PMI fell from 60.6 to 59.6, while the ISM Non-Manufacturing PMI jumped from 60.1 to 64.1.

While the sharp increase in service sector activity would normally put pressure on the FED, mid-week nonfarm payrolls disappointed.

According to the ADP, nonfarm payrolls increased by 330k in July, falling well short of a forecasted 715k jump. A marked improvement in labor market conditions would be needed for the FED to begin a more meaningful debate on policy change.

NFP numbers from Friday painted a very different picture to the ADP numbers mid-week…

Freddie Mac Rates

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

  • 30-year fixed rates fell by 3 basis points to 2.77% in the week. This time last year, rates had stood at 2.88%. The average fee fell from 0.7 points to 0.6 points.
  • 15-year fixed remained unchanged at 2.10% in the week. Rates were down by 34 basis points from 2.45% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates fell by 5 basis point to 2.40%. Rates were down by 50 points from 2.90% a year ago. The average fee rose from 0.3 points to 0.4 points.

According to Freddie Mac,

  • Treasury yields drifted lower as a result of global uncertainty over the continued spread of the Delta variant.
  • 30-year fixed rates fell back to where it stood at the start of the current year, with 15-year fixed at its historic low.
  • This bodes well for those looking to refinance, renovate, or even purchase a new home.

Mortgage Bankers’ Association Rates

For the week ending 30th July, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.01% to 2.97%. Points decreased from 0.34 to 0.33 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.03% to 3.08%. Points fell from 0.35 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.11% to 3.12%. 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, fell 1.7% in the week ending 30th July. In the week prior, the Index had increased by 5.7%.

The Refinance Index decreased 2% and was 3% lower than the same week a year ago. The index had increased 9% in the previous week.

In the week ending 30th July, the refinance share of mortgage activity increased from 67.5% to 67.6%. The share had risen from 64.9% to 67.5% in the week prior.

According to the MBA,

  • Interest rates drifted lower globally last week, as markets assessed the latest concerns regarding the delta variant.
  • 30-year mortgage rates dropped below 3% in the MBA survey for the first time since February.
  • The decline presented an opportunity for many homeowners yet to refinance to lower their rate and payments.
  • Refinance application volume decreased slightly, following an 11% jump from the week prior.
  • Purchase application volume fell again, reflecting the ongoing lack of inventory that continues to drive house price appreciation.

For the week ahead

It’s a quieter first half of the week. Economic data includes JOLTs job openings and inflation figures.

Expect inflation to have the greatest impact on yields. We also expect the previous week’s nonfarm payrolls to also provide yields with continued direction early in the week.

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

U.S Mortgage Rates Rise but Remain Well Below the 3% Mark

Mortgage rates rose for the first time 5-weeks in the week ending 29th July.

Following a 10 basis points decline from the previous week, 30-year fixed rates increased by 2 basis points to 2.80%.

While on the rise, 30-year mortgage rates have risen just once beyond the 3% Since 21st April.

Compared to this time last year, 30-year fixed rates were down by 19 basis points.

30-year fixed rates were still down by 214 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 on the U.S economic calendar.

Economic data included house price figures alongside durable goods and consumer confidence numbers.

A pickup in consumer confidence in July and a continued rise in durable goods orders were key in the week.

On the monetary policy front, the FED left policy unchanged mid-week, which was in line with market expectations. While delivering a positive economic outlook, FED Chair Powell continued to downplay any tapering plans.

After a risk-off start to the week, positive IMF economic growth forecasts for the U.S delivered further support to riskier assets in the week.

A continued rise in new COVID-19 cases globally remained a test market risk appetite, however.

Freddie Mac Rates

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

  • 30-year fixed rates rose by 2 basis points to 2.80% in the week. This time last year, rates had stood at 2.99%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed declined by 2 basis points to 2.10% in the week. Rates were down by 41 basis points from 2.51% a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates fell by 4 basis point to 2.45%. Rates were down by 49 points from 2.94% a year ago. The average fee fell from 0.4 points to 0.3 points.

According to Freddie Mac,

  • Home owners and buyers continue to benefit from some of the lowest mortgage rates of all-time.
  • Largely due to the current environment, the 30-year fixed-rate remains below 3% for the 4th consecutive week, while the 15-year fixed-rate hits another record low.

Mortgage Bankers’ Association Rates

For the week ending 23rd July, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.11% to 3.01%. Points decreased from 0.43 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.08% to 3.03%. Points rose from 0.31 to 0.35 (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 0.32 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 5.7% in the week ending 23rd July. In the week prior, the index had fallen by 4.0%.

The Refinance Index increased 9% and was 10% lower than the same week a year ago. The index had fallen by 3% in the previous week.

In the week ending 23rd July, the refinance share of mortgage activity increased from 64.9% to 67.2%. The share had risen from 64.1% to 64.9% in the week prior.

According to the MBA,

  • The 10-year Treasury yield declined last week as investors grew concerned about increasing COVID-19 case counts and the downside risks to the current economic recovery.
  • Refinance applications jumped in response to 30-year fixed rates falling to their lowest level since Feb-2021. The 15-year fell to another record low dating back to 1990.
  • The purchase index fell for the 2nd consecutive week to its lowest level since May-2020 and has now declined on an annual basis for the past 3-months.
  • Potential buyers continue to be put off by extremely high home prices and increased competition.
  • The FHFA reported that May home prices were 18% higher than a year ago, continuing a 7-month upward trend.

For the week ahead

It’s a busier first half of the week. Economic data includes private sector PMIs and ADP nonfarm employment change figures.

We can expect the ISM Non-Manufacturing PMI and ADP nonfarm employment change figures to be key.

From elsewhere, private sector PMI figures from China and the Eurozone will also influence market risk sentiment,

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

U.S Mortgage Rates Fall again as COVID-19 Delivers Yet More Uncertainty

Mortgage rates fell for the 9th time in 13-weeks and for a fourth straight week in the week ending 22nd July

Following a 2 basis points decline from the previous week, 30-year fixed rates decreased by 10 basis points to 2.78%.

Since 21st April, 30-year mortgage rates had risen just once beyond the 3% mark before the current pullback.

Compared to this time last year, 30-year fixed rates were down by 23 basis points.

30-year fixed rates were still down by 216 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 on the U.S economic calendar.

U.S economic data was limited to housing start and building permit figures for June. The numbers had a muted impact on U.S Treasury yields, with risk aversion plaguing the markets in the early part of the week.

Concerns over the continued spread of the Delta variant and its impact on the global economic recovery weighed on yields.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 10 basis points to 2.78% in the week. This time last year, rates had stood at 3.01%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed declined by 10 basis points to 2.12% in the week. Rates were down by 42 basis points from 2.54% a year ago. The average fee rose from 0.6 points 0.7 points.
  • 5-year fixed rates rose by 2 basis point to 2.49%. Rates were down by 60 points from 3.09% a year ago. The average fee rose from 0.3 points to 0.4 points.

According to Freddie Mac,

  • Concerns over the Delta variant, and the overall trajectory of the pandemic, are undoubtedly affecting economic growth.
  • While the economy continues to mend, Treasury yields have decreased and mortgage rates have followed suit.
  • Unfortunately, many homebuyers are unable to take advantage of low rates due to tight inventories and high prices.

Mortgage Bankers’ Association Rates

For the week ending 16th July, the rates were:

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.09% to 3.11%. Points increased from 0.37 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.15% to 3.08%. Points rose from 0.29 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.16% to 3.13%. Points increased from 0.27 to 0.32 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, fell by 4.0% in the week ending 16th July. In the week prior, the index had jumped by 16.0%.

The Refinance Index declined by 3% and was down 18% on the same week a year ago. The Index had surged by 20% in the previous week.

In the week ending 16th July, the refinance share of mortgage activity increased from 64.1% to 64.9%. The share had risen from has 61.6 to 64.1% in the previous week.

According to the MBA,

  • The 10-year Treasury yield dropped sharply last week, in part due to investors becoming more concerned about the spread of COVID variants and their impact on global economic growth.
  • On a seasonally adjusted basis, mortgage applications were lower compared to the 4th July holiday week.
  • Purchase applications fell back to near their lowest levels since May 2020.
  • Limited inventory and higher prices are keeping some prospective homebuyers out of the market.
  • Refinance activity fell over the week, though the pace of applications was close to its highest level since early May.

For the week ahead

It’s a busier first half of the week. Economic data includes durable goods and consumer confidence figures early in the week.

Expect the consumer confidence figures to be key.

The main event of the week, however, is the FOMC monetary policy decision and press conference on Wednesday.

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

U.S Mortgage Rates Fall for a Third Week as COVID-19 Delivers Uncertainty

Mortgage rates fell for a third consecutive week in the week ending 15th July

Following an 8 basis points decline from the previous week, 30-year fixed rates decreased by 2 basis points to 2.88%.

Since 21st April, 30-year mortgage rates had risen just once beyond the 3% mark before the current pullback.

Compared to this time last year, 30-year fixed rates were down by 10 basis points.

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

Economic Data from the Week

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

Key stats included consumer and wholesale inflation figures for June.

The stats were skewed to the positive, weighing on riskier assets in the week.

U.S inflationary pressures saw a marked pick up at the end of the quarter, raising concerns over FED policy and the economic outlook.

In June, the annual rate of inflation accelerated from 5.0% to 5.4%, with the core annual rate of inflation accelerating from 3.8% to 4.5%.

Wholesale inflationary pressures were also on the rise, pointing to a further pickup in consumer prices near-term. In June, the annual rate of wholesale inflation accelerated from 6.8% to 7.3%.

While the stats weighed on riskier assets, FED Chair Powell testimony to lawmakers looked to ease market tension mid-week.

The FED Chair spoke of the FED’s willingness to allow inflation to run hotter near-term in order to avoid making an erroneous policy decision.

Ultimately, however, market concerns over the resilience of the global economic recovery, a continued rise in new COVID-19 cases globally, and inflation weighed on yields.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 2 basis points to 2.88% in the week. This time last year, rates had stood at 2.98%. The average fee increased from 0.6 points to 0.7 points.
  • 15-year fixed rose by 2 basis points to 2.22% in the week. Rates were down by 26 basis points from 2.48% a year ago. The average fee fell from 0.7 points 0.6 points.
  • 5-year fixed rates fell by 5 basis point to 2.47%. Rates were down by 59 points from 3.06% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • The summer swoon in mortgage rates continues as 30-year fixed rates fell for a 3rd consecutive week.
  • Since an April peak of 3.18%, rates have declined by 30-basis points.
  • While the decline is not large, it provides modest relief to borrowers who are purchasing in a market with strong home appreciation and scant inventory.

Mortgage Bankers’ Association Rates

For the week ending 9th July, the rates were:

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.15% to 3.09%. Points decreased from 0.38 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.17% to 3.15%. Points fell from 0.32 to 0.29 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.20% to 3.16%. 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, jumped by 16.0% in the week ending 9th July. In the week prior, the index had fallen by 1.8%.

The Refinance Index surged by 20% and was 29% lower than the same week a year ago. The Index had fallen by 2% in the previous week.

In the week ending 9th July, the refinance share of mortgage activity increased from 61.6 to 64.1%. The share had had fallen from 61.9% to 61.6% in the previous week.

According to the MBA,

  • Overall applications climbed last week, driven heavily by refinancing as rates dipped again.
  • Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth.
  • The fall in mortgage rates for a 2nd consecutive week left 30-year fixed rates at their lowest level since Feb-2021.
  • While purchase applications increased last week, loan sizes decreased to their lowest level since Jan-2021.

For the week ahead

It’s a particularly quiet first half of the week. Economic data is limited to housing sector stats that should have a muted impact on yields.

The lack of stats will leave COVID-19 news updates and chatter from Capitol Hill to provide yields with direction early in the week.

U.S Mortgage Rates Fall Further Back from the 3% Mark

Mortgage rates fell once more in the week ending 8th July

Following a 4 basis points decline from the previous week, 30-year fixed rates decreased by 8 basis points to 2.90%.

Since 21st April, 30-year mortgage rates had risen just once beyond the 3% mark before the current pullback.

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

30-year fixed rates were still down by 204 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 on the U.S economic calendar.

Key stats included the all-important ISM Non-Manufacturing PMI figures for June and JOLT’s job openings for May.

It was a mixed start of numbers for the markets, with the ISM Non-Manufacturing PMI falling from 64.0 to 60.1.

By contrast, job openings rose from 9.193m to 9.209m in May. With the FOMC meeting minutes in focus mid-week, however, the stats had a muted impact on the markets.

A mixed set of signals from the FED that talked of patience but the need to discuss tapering of the asset purchasing program weighed on yields.

Market concerns over the pace of the global economic recovery also weighed on riskier assets before a Friday rebound.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 8 basis points to 2.90% in the week. This time last year, rates had stood at 3.03%. The average fee remained steady at 0.6 points.
  • 15-year fixed declined by 6 basis points to 2.20% in the week. Rates were down by 31 basis points from 2.51% a year ago. The average fee remained unchanged 0.7 points.
  • 5-year fixed rates slipped by 2 basis point to 2.52%. Rates were down by 50 points from 3.02% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • Mortgage rates decreased in response to a blip in U.S Treasury yields.
  • While mortgage rates tend to follow Treasury yields closely, other factors can also influence, including labor markets.
  • We expect economic growth to gradually drive interest rates higher.
  • Homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around 3%.

Mortgage Bankers’ Association Rates

For the week ending 2nd July, the rates were:

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.20% to 3.15%. Points decreased from 0.39 to 0.38 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.19% to 3.17%. Points fell from 0.34 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.23% to 3.20%. Points decreased from 0.33 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 1.8% in the week ending 2nd July. In the week prior, the index had declined by 6.9%.

The Refinance Index fell by 2% and was 8% lower than the same week one year ago. The Index had declined by 8% in the previous week.

In the week ending 2nd July, the refinance share of mortgage activity had fallen from 61.9% to 61.6%. The share had decreased from 62.5% to 61.9% in the previous week.

According to the MBA,

  • Mortgage application activity fell for the 2nd consecutive week, reaching the lowest level since the beginning of 2020.
  • Even as mortgage rates declined, both purchase and refinance applications decreased.
  • Treasury yields have been volatile despite mostly positive economic news, including last week’s June jobs report, which pointed to further improvement in the labor market.
  • While mortgage rates have fallen, many borrowers previously refinanced at even lower rates.
  • Refinance applications have trended lower than 2020 levels for the past 4-months.

For the week ahead

It’s another quiet first half of the week. Following a quiet end to the previous week, inflation figures for June will draw interest on Tuesday and Wednesday.

With concerns over inflation lingering, expect plenty of influence from the numbers.

Away from the economic calendar, COVID-19 news and FOMC member chatter will also need monitoring in the week.

U.S Mortgage Rates Drop Back to sub-3%

Mortgage rates fell for the 6th time in 10-weeks in the week ending 1st July

Partially reversing a 9 basis points rise from the previous week, 30-year fixed rates decreased by 4 basis points to 2.98%.

Since 21st April, 30-year mortgage rates had risen just once beyond the 3% mark before the decline. The solo visit was in the previous week.

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

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

Economic Data from the Week

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

Key stats included consumer confidence, ADP nonfarm employment change, and ISM manufacturing PMI figures.

The stats were skewed to the positive in the week, with consumer confidence hitting a 16-month high in June.

ADP nonfarm employment change figures also impressed, with the ADP reporting a 692k increase in nonfarm payrolls.

For the markets, the only negative was a modest decline in the ISM Manufacturing PMI from 61.2 to 60.6.

While the stats were skewed to the positive, market jitters over inflation eased in the week, supporting the downward trend in mortgage rates.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 4 basis points to 2.98% in the week. This time last year, rates had stood at 3.07%. The average fee fell from 0.7 points to 0.6 points.
  • 15-year fixed declined by 8 basis points to 2.26% in the week. Rates were down by 30 basis points from 2.56% a year ago. The average fee remained unchanged 0.7 points.
  • 5-year fixed rates increased by 1 basis point to 2.54%. Rates were down by 46 points from 3.10% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Economic growth remains steady and is bolstering more segments of the economy.
  • Although low and stable mortgage rates have kept the housing market booming in recent months, a deterioration in affordability and for-sale inventory has led to a market slowdown.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.18% to 3.20%. Points decreased from 0.48 to 0.39 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.21% to 3.19%. Points remained unchanged at 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.26% to 3.23%. Points decreased from 0.44 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, decreased by 6.9% in the week ending 25th June. In the week prior, the index had increased by 2.1%.

The Refinance Index fell by 8% from the previous week and was 15% lower than the same week a year ago. The Index had risen by 3% in the previous week.

In the week ending 25th June, the refinance share of mortgage activity had fallen from 62.5% to 61.9%. The share had increased from 61.7% to 62.5% in the previous week.

According to the MBA,

  • Mortgage application volume fell to the lowest level in almost 18-months, with declines in both refinance and purchase applications.
  • Rates were volatile last week as investors tried to gauge upcoming moves by the FED amidst divergent signals.
  • Rising inflation, mixed job market data, strong consumer spending, and a supply-constrained housing market were key considerations.
  • The average loan size for purchase applications increased, indicating that 1st time buyers are likely getting squeezed out of the market.

For the week ahead

It’s a quieter first half of the week. ISM Non-Manufacturing PMI figures for June will be in focus on Tuesday.

On Wednesday, JOLT’s job openings will also draw attention along with any FOMC member chatter in the week.

U.S Mortgage Rates Return to Above 3% for the First Time since April

Mortgage rates rose for the 4th time in 9-weeks in the week ending 24th June.

Reversing a 3 basis points decline from the previous week, 30-year fixed rates increased by 9 basis points to 3.02%.

Since 21st April, 30-year mortgage rates had failed to move above the 3% mark before the latest increase.

Compared to this time last year, 30-year fixed rates were down by 11 basis points.

30-year fixed rates were still down by 192 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

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

Housing sector data was in focus on Tuesday ahead of prelim private sector PMI figures for June on Wednesday.

The stats were skewed to the negative in the week but not enough to peg back mortgage rates.

Existing home sales fell by 0.9% in May, following on from a 2.7% slide in April. While negative, tight inventories likely contributed to the decline.

More significantly in the week, however, was slower service sector growth in June.

The services PMI fell from 70.4 to 64.8, while the manufacturing PMI rose from 62.1 to 62.6. As a result of the slide in the services PMI, the composite PMI fell from 68.7 to 63.9.

While the stats were skewed to the negative, market reaction to the previous week’s FOMC projections supported the pickup in mortgage rates.

Freddie Mac Rates

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

  • 30-year fixed rates rose by 9 basis points to 3.02% in the week. This time last year, rates had stood at 3.13%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 10 basis points to 2.34% in the week. Rates were down by 25 basis points from 2.59% 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 2.53%. Rates were down by 55 points from 3.08% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates have risen above 3% for the first time in 10-weeks.
  • As the economy progresses and inflation remains elevated, rates will likely continue to gradually rise over the remainder of the year.
  • For those homeowners who have not yet refinanced, and there remain many borrowers who could benefit from doing so – now is the time.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.11% to 3.18%. Points increased from 0.36 to 0.48 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.14% to 3.21%. Points rose from 0.33 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.20% to 3.26%. Points decreased from 0.46 to 0.44 (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 2.1% in the week ending 18th June. In the week prior, the Index had risen by 4.2%.

The Refinance Index rose 3% and was 9% lower than the same week a year ago. The Index had risen by 6% in the previous week.

In the week ending 18th June, the refinance share of mortgage activity increased from 61.7% to 62.5%. The share had risen from 60.4% to 61.7% in the previous week.

According to the MBA,

  • Mortgage rates increased to their highest level in a month.
  • Despite the rise, refinances increased for a second consecutive week.
  • Purchase applications have regained an upward trend over the past few weeks.
  • Activity was slightly higher for the 3rd straight week but remained lower than the same week a year ago.

For the week ahead

It’s a busier first half of the week. Consumer confidence figures for June will be in focus ahead of ADP nonfarm employment change figures on Wednesday.

Expect both sets of numbers to provide yields and, ultimately, mortgage rates with direction.

On the monetary policy front, FOMC member chatter will also influence in the early part of the week.

From elsewhere, private sector PMI figures from China will also provide riskier assets and yields with direction in the week.

U.S Mortgage Rates Fall Again ahead of the FOMC Projections

Mortgage rates fell for the 3rd time in 5-weeks in the week ending 17th June.

Following a 3 basis points decline from the previous week, 30-year fixed rates decreased by 3 basis points to 2.93%.

The modest decline in mortgage rates left 30-year fixed rates at sub-3% for a 4th consecutive week.

Compared to this time last year, 30-year fixed rates were down by 20 basis points.

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

Economic Data from the Week

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

On Tuesday, wholesale inflation and retail sales figures were in focus.

While wholesale inflationary pressures continued to build, retail sales disappointed in May.

Month-on-month, core retail sales fell by 0.7%, with retail sales sliding by 1.3%. Economists had forecast core retail sales to rise by 0.2% and for retail sales to fall by a more modest 0.8%.

Industrial production, manufacturing figures form NY State, and business inventories were also out but had a muted impact on the markets.

On Wednesday, the focus shifted to the FED’s monetary policy decision and FOMC projections that drove yields and the Dollar northwards.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 3 basis points to 2.93% in the week. This time last year, rates had stood at 3.13%. The average fee remained unchanged at 0.7 points.
  • 15-year fixed rose by 1 basis point to 2.24% in the week. Rates were down by 34 basis points from 2.58% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates decreased by 3 basis points to 2.52%. Rates were down by 57 points from 3.07% a year ago. The average fee increased from 0.2 points to 0.3 points.

According to Freddie Mac,

  • Mortgage rates continued to drift down as markets concur with the view that inflation increases are temporary.
  • While mortgage rates are low, purchase demand has weakened over the last couple of months.
  • The downward trend was attributed to affordability constraints stemming from high home prices.
  • With inventory tight, the slowdown in demand has yet to impact prices, meaning the summer will likely remain a strong seller’s market.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.15% to 3.11%. Points increased from 0.34 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.12% to 3.14%. Points fell from 0.34 to 0.33 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.29% to 3.20%. Points increased from 0.32 to 0.46 (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 4.2% in the week ending 11th June. In the week prior, the index had fallen by 3.1%.

The Refinance Index rose by 6% and was 22% lower than the same week one year ago. The Index had declined by 5% from the previous week.

In the week ending 11th June, the refinance share of mortgage activity increased from 60.4% to 61.7%. The share had declined from 61.3% to 60.4% in the previous week.

According to the MBA,

  • Mortgage applications bounced back after three weeks of decline.
  • Both purchase and refinance applications were up.
  • Demand returned as 30-year fixed rates fell for a third straight week to its lowest level since early May.
  • Market uncertainty over inflation and how the FED would respond led to a fall in U.S Treasury yields.

For the week ahead

It’s a quieter first half of the week. The markets will need to wait until Wednesday for prelim private sector PMI numbers from the U.S.

Expect the services PMI to have the greatest impact on yields.

On the monetary policy front FED Chair Powell testimony and FOMC member chatter will also influence.

U.S Mortgage Rates Ease Back Ahead of the Coming Week’s FED Policy Decision

Mortgage rates fell for the 2nd time in 4-weeks in the week ending 10th June.

Reversing a 4 basis points rise from the previous week, 30-year fixed rates decreased by 3 basis points to 2.96%.

The modest decline in mortgage rates left 30-year fixed rates at sub-3% for a 3rd consecutive week.

Compared to this time last year, 30-year fixed rates were down by 25 basis points.

30-year fixed rates were still down by 198 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 on the U.S economic calendar.

Economic data through the 1st half of the week included job openings and trade data for April.

The stats were skewed to the positive supporting the unwavering optimism towards the economic recovery.

Particularly disappointing nonfarm payroll numbers from the week prior and uncertainty ahead of inflation and labor market numbers later in the week weighed on Treasury yields and ultimately mortgage rates.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 3 basis points to 2.96% in the week. This time last year, rates had stood at 3.21%. The average fee rose from 0.6 to 0.7 points.
  • 15-year fixed fell by 4 basis 2.23% in the week. Rates were down by 39 basis points from 2.62% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates decreased by 9 basis points to 2.55%. Rates were down by 55 points from 3.10% a year ago. The average fee remained unchanged at 0.2 points.

According to Freddie Mac,

  • The economy is recovering at a remarkably fast pace. As the pandemic restrictions continue to lift, economic growth will remain strong over the coming months.
  • Despite the stronger economy, the housing market is experiencing a slowdown in purchase application activity due to modestly higher mortgage rates.
  • However, it has yet to translate into a weaker home price trajectory because the shortage of inventory continues to cause pricing to remain elevated.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.17% to 3.15%. Points decreased from 0.39 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.16% to 3.12%. Points rose from 0.31 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.34% to 3.29%. Points decreased from 0.38 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, fell by a further 3.1% in the week ending 4th June. In the week prior, the index had fallen by 4.0%.

The Refinance Index fell by another 5% from the previous week and was 27% lower than the same week one year ago. The index had declined by 5% from the previous week.

In the week ending 4th June, the refinance share of mortgage activity decreased from 61.3% to 60.4%. The share had declined from 61.4% to 61.3% in the previous week.

According to the MBA,

  • Most of the decline in mortgage rates came last week, with the 30-year fixed mortgage rate declining to 3.15%. This likely impacted refinance applications.
  • With fewer homeowners able to take advantage of lower rates, the refinance share dipped to the lowest level since April.
  • The average loan size on a purchase application edged down to $407,000, below the $418,000 record set in February.
  • Home-price growth continues to accelerate, driven by favorable demographics, the recovering job market and economy, and housing demand far outpacing supply.

For the week ahead

Wholesale inflation and retail sales figures will draw attention and influence mortgage rates.

The main event of the week, however, will be the FOMC monetary policy decision and projections.

Expect these to be the key to U.S Treasury yields and mortgage rates in the week ahead.

From elsewhere, economic data from China will also be a factor.

U.S Mortgage Rates Continued to Sit at sub-3% ahead of Disappointing NFP Numbers

Mortgage rates were on the rise once more, logging a 3rd weekly increase in 4-weeks.

Reversing a 5 basis points fall from the previous week, 30-year fixed rates increased by 4 basis points to 2.99%.

The modest increase in mortgage rates left 30-year fixed rates at sub-3% for a 2nd consecutive week.

Compared to this time last year, 30-year fixed rates were down by 19 basis points.

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

Economic Data from the Week

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

Key stats included manufacturing PMI numbers for May. The stats were skewed to the positive supporting the market optimism towards the economic outlook.

In May, the market’s preferred ISM Manufacturing PMI increased from 60.7 to 61.2.

There was also FOMC chatter in the week of a willingness to begin discussing a tapering to the asset purchasing program.

Joined with U.S President’s spending plans, rates nudged up in the week.

Freddie Mac Rates

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

  • 30-year fixed rates rose by 4 basis points to 2.99% in the week. This time last year, rates had stood at 3.18%. The average fee fell from 0.7 to 0.6 points.
  • 15-year fixed remained unchanged at 2.27% in the week. Rates were down by 35 basis points from 2.62% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates increased by 5 basis points to 2.64%. Rates were down by 46 points from 3.10% a year ago. The average fee remained unchanged at 0.2 points.

According to Freddie Mac,

  • Home prices continued to accelerate while inventories remained low.
  • New home construction cannot catch up fast enough adding further upward pressure on house prices.
  • There are many potential homebuyers who would like to take advantage of low mortgage rates.
  • Competition is strong, however.
  • For homeowners, continued low rates make refinancing an option worth considering.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed conforming loan balances decreased from 3.18% to 3.17%. Points increased from 0.35 to 0.39 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.20% to 3.16%. Points rose from 0.25 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.30% to 3.34%. Points increased from 0.30 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, fell by a further 4.0% in the week ending 28th May. In the week prior, the index had declined by 4.2%.

The Refinance Index fell by 5% from the previous week and was 6% higher than the same week one year ago. The index had declined by 7% in the previous week.

In the week ending 28th May, the refinance share of mortgage activity decreased from 61.4% to 61.3% of total applications. The share had declined from 63.3% to 61.4% in the previous week.

According to the MBA,

  • Mortgage applications decreased for a 2nd week in a row, with the overall index reaching its lowest level since Feb-2020.
  • Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continued to hold back purchase activity.
  • The government purchase index fell to its lowest level in over a year and has now fallen year-on-year for 5 straight weeks.
  • Purchase applications were down almost 2% from a year ago.
  • Refinance activity also dropped for a 2nd consecutive week.
  • Even through rates have fallen below 3.2% over the past month, they are still around 20-30 basis points higher than the record lows in late 2020.

For the week ahead

It’s a particularly quiet first half of the week on the U.S economic calendar. JOLT’s job openings and trade figures are due out early in the week.

Following some disappointing NFP numbers from Friday, expect more interest in April’s job openings.

From elsewhere, trade data from China will also influence market risk sentiment early in the week.

May’s nonfarm payroll figures from the U.S, however, will likely support a pullback in mortgage rates in the week.

On the monetary policy front, FOMC chatter will also influence, however. Friday’s NFP numbers have raised some doubt over whether the FED will make a near-term move…

U.S Mortgage Rates Fall Back to sub-3%

After 2 consecutive weekly rises, U.S mortgage rates fell back to sub-3% levels in the week ending 27th May.

Reversing a 6-basis points rise from the previous week, 30-year fixed rates fell by 5 basis points to 2.95%.

Compared to this time last year, 30-year fixed rates were down by 20 basis points.

30-year fixed rates were still down by 199 basis points since November 2018’s last peak of 4.94%.

Economic Data from the Week

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

Key stats included consumer confidence figures for May and housing sector data for April.

The CB Consumer Confidence Index slipped from 117.5 to 117.2 in May. In spite of the decline, there were few alarm bells, however, with market optimism towards the economic outlook key in the week.

On the housing data front, however, the numbers were mixed.

In April, new home sales slid by 5.9%, with pending home sales falling by 4.4%. Low inventories were to blame for the disappointing numbers.

With inventories an issue, house prices continue to rise. In March, the S&P/CS HPI Composite – 20 n.s.a was up 13.3% year-on-year. In February, the index had been up 12%.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 5 basis point to 2.95% in the week. This time last year, rates had stood at 3.15%. The average fee rose from 0.6 to 0.7 points.
  • 15-year fixed rates decreased by 2 basis points to 2.27% in the week. Rates were down by 35 basis points from 2.62% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates remained unchanged at 2.59% for a second consecutive week. Rates were down by 54 points from 3.13% a year ago. The average fee declined from 0.3 points to 0.2 points.

According to Freddie Mac,

  • The fall in mortgage rates to below 3% continued to offer many homeowners the potential to refinance and increase their monthly cash flow.
  • Homeowners who refinanced their 30-year fixed mortgage in 2020 saved more than $2,800 annually.
  • Substantial opportunity continues to exist today.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed with conforming loan balances increased from 3.15% to 3.18%. Points decreased from 0.36 to 0.35 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.13% to 3.20%. Points fell from 0.30 to 0.25 (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 0.27 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, slid by 4.2% in the week ending 21st May. In the week prior, the index had increased by 1.2%.

The Refinance Index fell by 7% from the previous week and was 9% lower than the same week one year ago. The Index had risen by 4% in the previous week.

In the week ending 21st May, the refinance share of mortgage activity decreased from 63.3% to 61.4% of total applications. The share had increased from 61.3% to 63.3% in the previous week.

According to the MBA,

  • Mortgage applications decreased last week as mortgage rates increased to 3.18%.
  • Refinances also declined as a result.
  • Purchase applications increased for the second time in 3-weeks, rebounding after a rather week April.
  • While purchase activity was around 4% lower than a year ago, the comparison is to last spring’s upswing in activity as pandemic-related lockdowns lifted.
  • Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices.

For the week ahead

It’s another quiet first half of the week on the U.S economic calendar. Manufacturing PMI figures for May will be in focus on Tuesday.

The market’s preferred ISM survey-based figures will be the key driver early in the week.

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

On the monetary policy front, central bank chatter will also need digesting.

U.S Mortgage Rates Return to 3% for the First Time in 5-Weeks

It was just a 2nd weekly increase in 7-weeks for U.S mortgage rates in the week ending 20th May. Reversing a 2 basis points fall from the week prior, 30-year fixed rates rose by 6 basis points to 3.00%.

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

30-year fixed rates were still down by 194 basis points since November 2018’s last peak of 4.94%.

Notably, mortgage rates returned to the 3% mark for the first time in five weeks.

Economic Data from the Week

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

Key stats included NY Empire State Manufacturing figures for May and housing sector data for April.

In May, the NY Empire State Manufacturing Index fell from 26.3 to 24.3.

Housing sector numbers were also skewed to the negative.

Building permits rose by a modest 0.3% in April, following a 1.7% increase in March. Housing starts slid by 9.5%, following a 19.8% surge in March.

While the stats were on the lighter side, the FOMC meeting minutes on Wednesday supported a pickup in U.S Treasury yields.

Talk amongst members of a review of monetary policy, in light of the economic rebound, drove yields northwards.

Freddie Mac Rates

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

  • 30-year fixed rates rose by 6 basis point to 3.00% in the week. This time last year, rates had stood at 3.24%. The average fee fell from 0.7 to 0.6 points.
  • 15-year fixed increased by 3 basis points to 2.29% in the week. Rates were down by 41 basis points from 2.70% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates remained unchanged at 2.59%. Rates were down by 58 points from 3.17% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Following a run up over the first few months of the year, rates have paused and hovered at around the 3% mark since March.
  • While the low-rate environment is positive for buyers, a shortage of homes for sale remains an issue.
  • The lack of housing supply has been compounded by labor disruptions and expensive building materials that are pushing new home prices northwards.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.11% to 3.15%. Points increased from 0.32 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.07% to 3.13%. Points fell from 0.34 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.27% to 3.31%. Points decreased from 0.34 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 1.2% in the week ending 14th May. In the week prior, the index had risen by 2.1%.

The Refinance Index rose by 4% and was 2% lower than the same week a year ago. The Index had risen by 3% in the week prior.

In the week ending 14th May, the refinance share of mortgage activity increased from 61.3% to 63.3%. The share had risen from 61.0 to 61.3% in the previous week.

According to the MBA,

  • All loan types hit their highest level in two weeks, though were still lower than levels reported in late March and early April.
  • Ongoing volatility in refinance applications is likely if rates continue to oscillate around current levels.
  • There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity.
  • Building shortages and higher costs are making it more difficult to increase supply.
  • As a result, home prices and average purchase loan balances continue to rise.
  • The average purchase application reached $411,400 – the highest since February.

For the week ahead

It’s another quiet first half of the week on the U.S economic calendar. Consumer confidence figures for May are due out on Tuesday. A pickup in consumer confidence would support a further increase in yields following the latest FOMC meeting minutes.

On the monetary policy front, FOMC member chatter could also influence yields in the week ahead. With talk of a review of the FED’s current stance on monetary policy, the markets will be looking to get a sense of where the balance lies between the hawks and the doves.

U.S Mortgage Rates Fall Again, Leaving Rates at sub-3% for a 4th Consecutive Week

It was a 5th weekly decline in 6-weeks for U.S mortgage rates in the week ending 13th May. Following a 2 basis points fall from the week prior, 30-year fixed rates fell by 2 basis points to 2.94%.

Compared to this time last year, 30-year fixed rates were down by 34 basis points.

30-year fixed rates were still down by 200 basis points since November 2018’s last peak of 4.94%.

Notably, mortgage rates remained below prior the 3% mark for a 4th consecutive week.

Economic Data from the Week

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

Key stats included JOLTs job openings for March and April inflation figures for the U.S.

The stats were skewed to the positive. JOLTs job openings increased from 7.526m to 8.123m in March.

Inflationary pressures were also on the rise, leading to risk aversion mid-week over the possibility of a shift in FED monetary policy.

In April, the annual rate of core inflation accelerated from 1.6% to 3.0%.

The inflation figures followed Friday’s disappointing nonfarm payroll figures for April.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 2 basis point to 2.94% in the week. This time last year, rates had stood at 3.28%. The average fee rose from 0.6 to 0.7 points.
  • 15-year fixed decreased by 4 basis points to 2.26% in the week. Rates were down by 46 basis points from 2.72% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates slid by 11 basis points to 2.59%. Rates were down by 59 points from 3.18% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Since the most recent peak, mortgage rates have declined nearly a quarter of a percent and have remained under 3% for the past month.
  • Low rates offer homeowners an opportunity to lower their monthly mortgage payment by refinancing.
  • Additionally, the low mortgage rate environment has been a boon for the housing market.
  • This may not last, however, as consumer inflation has accelerated at the fastest pace in more than 12-years, which could lead to higher mortgage rates in the summer.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.18% to 3.11%. Points decreased from 0.34 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA fell from 3.13% to 3.07%. Points rose from 0.22 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.31% to 3.27%. Points increased from 0.27 to 0.34 (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 2.1% in the week ending 7th May. In the week prior, the index had fallen by 0.9%.

The Refinance Index rose 3% and was 12% lower than the same week a year ago. The Index had fallen by 0.1% in the week prior.

In the week ending 7th May, the refinance share of mortgage activity increased from 61.0 to 61.3%. The share had risen from 60.6% to 61.0% in the previous week.

According to the MBA,

  • Mortgage rates fell last week to the lowest levels since February, tracking the dip in Treasury yields.
  • The decline in rates helped the refinance index reach its highest level in 8-weeks.
  • Additionally, refinance loan balances increased for the 4th straight week.
  • The first week of May was also a strong week for the purchase market. Applications were up 13% from a year ago.
  • Housing market activity continues to be constrained by insufficient inventory levels.

For the week ahead

It’s a particularly quiet first half of the week on the U.S economic calendar. NY Empire State Manufacturing figures for May will be in focus at the start of the week.

Housing sector figures for April are also due out but will likely have a muted impact on Treasury yields and mortgage rates.

From elsewhere, fixed asset investment and industrial production figures from China will also influence market risk sentiment in the week.

With economic data on the quieter side, central bank chatter and geopolitics will also provide yields with direction.

Mortgage Rates at sub-3% for a Third Consecutive Week

Mortgage rates fell for a 4th week in 5-weeks in the week ending 6th May. Reversing a 1 basis point rise from the week prior, 30-year fixed rates fell by 2 basis points to 2.96%.

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

30-year fixed rates were still down by 198 basis points since November 2018’s last peak of 4.94%.

Notably, mortgage rates remained below prior the 3% mark for a 3rd consecutive week.

Economic Data from the Week

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

Key stats included private sector PMI numbers for April, factory orders and trade data, and ADP nonfarm employment change figures.

The stats were skewed to the negative, with the market’s favored ISM Non-Manufacturing PMI falling from 63.7 to 62.7.

Manufacturing sector growth also softened in April, with the ISM Manufacturing PMI falling from 64.7 to 60.7

In March, the U.S trade deficit widened from $70.5bn to $74.4bn, while factory orders rose by a weaker than expected 1.1%.

Also falling short of forecasts was a 742k increase in nonfarm employment according to the ADP. Economists had forecast an 800k rise.

The weaker stats coupled with the FED’s assurances of low for longer pegged back Treasury yields and mortgage rates.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 2 basis point to 2.96% in the week. This time last year, rates had stood at 3.26%. The average fee fell from 0.7 to 0.6 points.
  • 15-year fixed decreased by 1 basis point to 2.30% in the week. Rates were down by 43 basis points from 2.73% a year ago. The average fee decreased from 0.7 points to 0.6 points.
  • 5-year fixed rates rose by 6 basis points to 2.70%. Rates were down by 47 points from 3.17% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • Mortgage rates have remained under 3% for 3 consecutive weeks.
  • Consumer income and spending are on the rise, leading to a pickup in economic growth.
  • The combination of low and stable rates, together with an improving economy, is good for homebuyers.
  • This is also a positive for homeowners who may have missed previous opportunities to refinance and increase monthly cash flow.

Mortgage Bankers’ Association Rates

For the week ending 30th April, the rates were:

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.17% to 3.18%. Points increased from 0.30 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.12% to 3.13%. Points fell from 0.24 to 0.21 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.28% to 3.31%. Points decreased 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, declined by 0.9% in the week ending 30th April. In the week prior, the index had fallen by 2.5%.

The Refinance Index rose by 0.1% and was 17% lower than the same week a year earlier. The Index had fallen by 1.0% in the week prior.

In the week ending 30th April, the refinance share of mortgage activity increased from 60.6% to 61.0%. The share had risen from 60.0% to 60.6% in the previous week.

According to the MBA,

  • Mortgage rates were slightly higher last week, leading to a fall in purchase applications for a second straight week.
  • Refinance applications were essentially unchanged in the final week of April.
  • Average loan sizes were on the rise, driven by a competitive purchase market, attributable to low housing inventories and high demand.

For the week ahead

It’s a quieter first half of the week on the U.S economic calendar. JOLTs job openings and inflation figures are in focus.

Following last week’s disappointing nonfarm payroll figures, however, the markets may be desensitized to any pickup in inflationary pressures.

That should leave mortgage rates at sub-3% levels for a 4th consecutive week.