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.

Mortgage Rates Rates Avoid a 4th Consecutive Weekly Fall as COVID-19 Pegs Back Yields

Mortgage rates avoided a fourth consecutive weekly rise in the week ending 29th April. Following a 7-basis points decline from the week prior, 30-year fixed rates rose by 1 basis point to 2.98%.

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

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

Notably, mortgage rates remained below prior; the 3% mark.

Economic Data from the Week

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

Key stats included durable goods and core durable goods and consumer confidence figures.

The stats were skewed to the positive, supporting the optimistic economic outlook.

Core durable goods increased by 1.6% to reverse a 0.3% decline from February, with durable goods up by 0.5%.

More significantly, the CB Consumer Confidence Index jumped from 109.0 to 121.7 in April, pointing to a continued pickup in consumption.

On the monetary policy front, the FED was also in action on Wednesday. In line with market expectations, the FED left policy unchanged, while reassuring the markets that there would be no shift in its current stance.

Freddie Mac Rates

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

  • 30-year fixed rates rose by 1 basis point to 2.98% in the week. This time last year, rates had stood at 3.23%. The average fee held steady at 0.7 points.
  • 15-year fixed increased by 2 basis points to 2.31% in the week. Rates were down by 46 basis points from 2.77% a year ago. The average fee increased from 0.6 points to 0.7 points.
  • 5-year fixed rates tumbled by 19 basis points to 2.64%. Rates were down by 50 points from 3.14% a year ago. The average fee remained unchanged at 0.3 points.

According to Freddie Mac,

  • The upward trend in U.S Treasury yields paused a month ago as a result of rising COVID-19 cases globally.
  • Yields have remained within a tight range as the markets digest incoming economic data.
  • The good news is that with rates under 3%, refinancing continues to be attractive for many borrowers who financed before 2020.
  • But for eager buyers, especially first-time homebuyers, inventory continues to be extremely tight.
  • Competition for available homes to purchase remains high.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.20% to 3.17%. Points decreased from 0.36 to 0.30 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.15% to 3.12%. Points fell from 0.31 to 0.24 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.34% to 3.28%. Points increased from 0.29 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 by 2.5% in the week ending 23rd April. In the week prior, the index had increased by 8.6%.

The Refinance Index slipped by 1.0% and was 18% lower than the same week a year earlier. The Index had jumped by 10.0% in the week prior.

In the week ending 23rd April, the refinance share of mortgage activity increased from 60.0% to 60.6%. In the previous week, the share had increased from 59.2% to 60.0%.

According to the MBA,

  • Mortgage applications decreased last week even with mortgage rates falling for a 3rd consecutive week.
  • The 30-year fixed rate was down 3 basis points to 3.17%, which is still 32 basis points higher than the low reported in Dec-2020.
  • Even with a few weeks of lower rates, borrowers have likely already refinanced. This is why activity has decreased in seven of the last eight weeks.
  • The purchase market’s recent slide comes despite a strengthening economy and labor market.
  • Activity is still above year-ago levels, but accelerating home-price growth and low inventory has led to a decline in purchase applications in four of the last five weeks.

For the week ahead

It’s a busier first half of the week on the U.S economic calendar. The market’s preferred ISM private sector survey PMIs are due out along with ADP nonfarm employment change figures.

Following impressive stats from the U.S last week, another set of positive numbers could nudge yields northwards.

Much will depend on the COVID-19 vaccination front, however, and whether governments can curb the current upward global trend in new COVID-19 cases.

On the monetary policy front, FED Chair Powell is scheduled to speak early in the week, which will also garner plenty of interest.

Mortgage Rates Fall for a 3rd Consecutive Week and Return to sub-3% Levels

Mortgage rates fell for the third consecutive week in the week ending 22nd  April. Following a 9-basis points decline from the week prior, 30-year fixed rates fell by 7 basis points to 2.97%.

Compared to this time last year, 30-year fixed rates were down by 36 basis points.

30-year fixed rates were still down by 197 basis points since November 2018’s last peak of 4.94%.

Notably, mortgage rates fell back below the 3% mark.

Economic Data from the Week

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

There were no major stats from the U.S to influence U.S Treasury yields and mortgage rates in the week.

While there were no stats, a rise in new COVID-19 cases globally tested support for riskier assets in the week.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 7 basis point to 2.97% in the week. This time last year, rates had stood at 3.33%. The average fee held steady at 0.7 points.
  • 15-year fixed declined by 6 basis points to 2.29% in the week. Rates were down by 57 basis points from 2.86% a year ago. The average fee decreased from 0.7 points to 0.6 points.
  • 5-year fixed rates rose by 3 basis points to 2.83%. Rates were down by 45 points from 3.28% a year ago. The average fee fell from 0.4 points to 0.3 points.

According to Freddie Mac,

  • The fall in mortgage rates is good news for homeowners who are still looking to take advantage of the very low rate environment,
  • Freddie Mac research suggests that lower income and minority homeowners have been less likely to engage in the refinance market.
  • Low and declining mortgage rates provide these homeowners the opportunity to reduce their monthly payment and improve their financial position.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.27% to 3.20%. Points increased from 0.33 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.24% to 3.15%. Points fell from 0.40 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.35% to 3.34%. Points decreased from 0.34 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 8.6% in the week ending 16th April. In the week prior, the index had fallen by 3.7%.

The Refinance Index jumped by 10.0% and was 23% lower than the same week a year ago. The index had fallen by 5.0% in the week prior.

In the week ending 16th April, the refinance share of mortgage activity increased from 59.2% to 60.0%. In the previous week, the share had decreased from 60.3% to 59.2%.

According to the MBA,

  • Mortgage rates dropped to their lowest levels in around 2-months, driving a jump in refinance activity.
  • In the 6-weeks, prior, refinance activity had been in decline.
  • Borrowers acted on the decrease in rates for most loan types.
  • The spring housing market also saw a boost from lower rates. Purchase applications were on the rise in response.
  • MBA expects the purchase market to remain strong, with recovering job market and supportive demographics fueling housing demand near-term.

For the week ahead

It’s a quiet first half of the week on the U.S economic calendar. Core durable goods and durable goods orders are in focus along with consumer confidence figures.

Expect core durable goods and consumer confidence to have the greatest impact on yields.

Mid-week, the FED delivers its April monetary policy decision. With the markets expecting the FED to stand pat on policy, the rate statement will be the key driver.

U.S Mortgage Rates Fall for a Second Consecutive Week

Mortgage rates fell for the second time in 9-weeks in the week ending 15th April. Following a 5-basis points decline from the week prior, 30-year fixed rates fell by 9 basis points to 3.04%.

Compared to this time last year, 30-year fixed rates were down by 27 basis points.

30-year fixed rates were still down by 190 basis points since November 2018’s last peak of 4.94%.

Notably, however, it was just the seventh plus 3% week since July of last year.

Economic Data from the Week

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

On the economic data front, March inflation figures were in focus early in the week.

Following the FED’s assurances of unwavering policy support, however, the stats had a muted impact on yields.

In March, the annual core rate of inflation accelerated from 1.3% to 1.6%, rising above a forecasted 1.5%.

Month-on-month, core consumer prices increased by 0.3%, with consumer prices rising by 0.6%.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 9 basis point to 3.04% in the week. This time last year, rates had stood at 3.31%. The average fee held steady at 0.7 points.
  • 15-year fixed declined by 7 basis points to 2.35% in the week. Rates were down by 45 basis points from 2.80% a year ago. The average fee increased from 0.6 points to 0.7 points.
  • 5-year fixed rates slid by 12 basis points to 2.80%. Rates were down by 54 basis points from 3.34% a year ago. The average fee rose from 0.1 point to 0.4 points.

According to Freddie Mac,

  • The economy is improving on the demand side and on the supply side, while a variety of goods and materials remain scarce.
  • As a result of this imbalance, pricing pressures are building and causing inflation to rise.
  • Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of the year.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.36% to 3.27%. Points decreased from 0.43 to 0.33 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.36% to 3.24%. Points rose from 0.36 to 0.40 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.41% to 3.35%. Points decreased from 0.41 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, fell by 3.7% in the week ending 9th April. In the week prior, the index had fallen by 5.1%.

The Refinance Index declined by 5.0% and was 31% lower than the same week a year ago. The index had also fallen by 5% in the week prior.

In the week ending 9th April, the refinance share of mortgage activity decreased from 60.3% to 59.2%. In the previous week, the share had declined from 60.6% to 60.3%.

According to the MBA,

  • Purchase and refinance applications fell, with most of the pullback coming earlier in the week, when rates were higher.
  • Treasury yields started last week high – close to the prior week’s level at over 1.7% before falling 6 basis points.
  • Refinance activity has now decreased for nine of the past 10-weeks, as rates have gone from 2.92% to 3.27% over the period.
  • Last week’s index level was the lowest in over a year, as mortgage rates continue to trend higher.
  • Many borrowers have either refinanced at lower rates or are unwilling – or unable – to refinance at current rates.
  • A third straight week of declining purchase activity is a sign that rising home prices and tight supply are constraining home sales.
  • Purchase applications were still above last year’s pandemic-impacted low point but fell behind the level of activity seen in the same week in 2019.

For the week ahead

It’s a quiet first half of the week on the U.S economic calendar. There are no material stats from the U.S to influence yields.

The lack of stats will leave geopolitics and COVID-19 in focus early in the week.

U.S Mortgage Rates Fall for the First Time in 9-Weeks

Mortgage rates fell for the first time in 9-weeks in the week ending 8th April. Reversing a 1-basis point decline from the week prior, 30-year fixed rates fell by 5 basis points to 3.13%.

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

30-year fixed rates were still down by 181 basis points since November 2018’s last peak of 4.94%.

Notably, however, it was just the sixth plus 3% week since July of last year.

Economic Data from the Week

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

On the economic data front, service sector PMI, factory orders, and trade data were in focus.

It was a mixed bag on the economic data front, however.

While service sector data continued to impress, factory orders and trade data for February disappointed in the week.

Ultimately, however, it was the FED that pinned back U.S Treasury yields, supporting a pullback in mortgage rates.

The FOMC meeting minutes late on Wednesday reflected the FED’s commitment to leave policy unchanged for the foreseeable future.

This was in line with FED Chair Powell’s most recent testimony to lawmakers.

Freddie Mac Rates

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

  • 30-year fixed rates fell by 5 basis point to 3.13% in the week. This time last year, rates had stood at 3.33%. The average fee held steady at 0.7 points.
  • 15-year fixed declined by 3 basis points to 2.42% in the week. Rates were down by 35 basis points from 2.77% a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates increased by 8 basis points to 2.92%. Rates were down by 48 points from 3.40% a year ago. The average fee fell from 0.3 points to 0.1 point.

According to Freddie Mac,

  • Mortgage rates fell for the first time in 7-weeks as a result of a modest decline in U.S Treasury yields.
  • As the economy recovers, there should be a strong rebound in the labor market.
  • Combined, these positive signals will continue to bolster purchase demand.
  • The drop in rates creates yet another opportunity for those who have yet to refinance.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.33% to 3.36%. Points increased from 0.39 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.29% to 3.36%. Points rose from 0.34 to 0.36 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.34% to 3.41%. Points increased from 0.31 to 0.41 (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 5.1% in the week ending 2nd April. In the previous week, the index had fallen by 2.2%.

The Refinance Index declined by 5.0% and was 20% lower than the same week a year ago. The index had fallen by 3% in the week prior.

In the week ending 2nd April, the refinance share of mortgage activity decreased from 60.6% to 60.3%. In the previous week, the share had declined from 60.9% to 60.6%.

According to the MBA,

  • Mortgage rates resumed their upward trend last week, with the 30-year fixed returning to the highest level since last June.
  • The rise contributed to a slowdown in applications for both purchases and refinances.
  • Improving labor market conditions, driven by a rapidly recovering economy, is generating sizeable home buying demand.
  • In recent weeks, however, quicker home-price growth and extremely low inventory has constrained activity.
  • Refinance applications fell for a 5th consecutive week, with refinance demand down by more than 30% over the past 10-weeks.

For the week ahead

It’s a quiet first half of the week on the U.S economic calendar. Key stats are limited to March inflation figures.

While the FED continues to assure the markets of an extended hold on monetary policy, a marked pickup in inflationary pressures would likely nudge yields northwards.

With economic data on the lighter side, news from Capitol Hill and any FOMC member chatter will also influence in the week.

U.S Mortgage Rates Make it 7 in a Row as Economic Data Fuels Optimism

Mortgage rates were on the rise for a 7th consecutive week in the week ending 1st April. Following an 8-basis points rise from the week prior; 30-year fixed rates rose by a further 1 basis point to 3.18%.

Compared to this time last year, 30-year fixed rates were down by just 15 basis points.

30-year fixed rates were still down by 176 basis points since November 2018’s last peak of 4.94%.

Notably, however, it was just the fifth plus 3% week since July of last year and the highest rate since 10th June 2020, where 30-year fixed rates stood at 3.21%.

Economic Data from the Week

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

On the economic data front, consumer confidence, Chicago PMI, and employment figures were in focus.

The stats were skewed to the positive.

Consumer confidence improved further in March, with the CB Consumer Confidence Index rising from 90.4 to 109.7.

ADP nonfarm employment change figures were also positive. The ADP reported a 517k increase in nonfarm payrolls ahead of the government’s official figures on Friday. The jump came off the back of a 176k rise in February.

Adding to the bullish sentiment towards the U.S economy was a rise in the Chicago PMI from 59.5 to 66.3 in March.

Other stats included housing sector data.

Pending home sales took a hit in February, tumbling by 10.6%, while house prices saw a marked increase in January.

The S&P/CS HPI Composite rose by 11.0%, year-on-year, in January. In December, house prices had risen by just 0.2%.

Away from the economic calendar, the U.S government’s spending plans added support for riskier assets in the week.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 1 basis point to 3.18% in the week. This time last year, rates had stood at 3.33%. The average fee held steady at 0.7 points.
  • 15-year fixed rates held steady at 2.45% in the week. Rates were down by 37 basis points from 2.82% a year ago. The average fee held steady at 0.6 points.
  • 5-year fixed rates also held steady at 2.84%. Rates were down by 56 points from 3.40% a year ago. The average fee rose from 0.2 points to 0.3 points.

According to Freddie Mac,

  • In spite of low mortgage rates, there is evidence of a pullback by those looking to enter the housing market.
  • Homebuyer demand has gone from 25% above pre-COVID levels at the start of the to 8% above pre-COVID levels today.
  • Purchase demand has diminished compared with late May and early June 2020, when mortgage rates were at the same level.
  • This confirms that the marginal buyer is feeling the affordability squeeze resulting from rising mortgage rates and house prices.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances decreased from 3.36% to 3.33%. Points decreased from 0.42 to 0.39 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA decreased from 3.35% to 3.29%. Points fell from 0.41 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.40% to 3.34%. Points decreased from 0.43 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, decreased by 2.2% in the week ending 26th March. In the previous week, the index had decreased by 2.5%.

The Refinance Index fell by 3% from the previous week and was 32% lower than the same week one year ago. The index had fallen by 4% in the week prior.

In the week ending 26th March, the refinance share of mortgage activity declined from 60.9% to 60.6%. In the previous week, the share had decreased from 62.9% to 60.9%.

According to the MBA,

  • After 7 consecutive weeks of increasing mortgage rates, the 30-year fixed rate declined by 3 basis points.
  • In spite of the decline, rates remained almost half a percentage point higher than the start of this year.
  • Mortgage applications for refinances and home purchases both declined.
  • Purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago.
  • Many prospective buyers this spring are feeling the effects of higher rates and rapidly accelerating home prices.
  • Record low inventory is pushing home-price growth at double the rate from a year ago and above the 10% growth rates seen in 2005.
  • The housing market is in desperate need of more inventory to cool price growth and preserve affordability.
  • Additionally, higher mortgage rates continue to shut down refinance activity.

For the week ahead

It’s another relatively quiet first half of the week on the U.S economic calendar. Key stats include ISM Non-Manufacturing PMI, factory orders, and JOLTs job openings.

Expect the ISM Non-Manufacturing PMI figures to have the greatest impact on U.S Treasury yields.

Away from the economic calendar, chatter from Capitol Hill on spending, FOMC member commentary, and geopolitics will also influence.

U.S Mortgage Rates Rise for a 6th Consecutive Week

Mortgage rates were on the rise for a 6th consecutive week in the week ending 25th March. Following a 4-basis points rise from the week prior; 30-year fixed rates rose by a further 8 basis points to 3.17%.

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

30-year fixed rates were still down by 177 basis points, however, since November 2018’s last peak of 4.94%.

Notably, it was just the fourth plus 3% week since July of last year and the highest rate since 10th June 2020, where 30-year fixed rates had stood at 3.21%.

Economic Data from the Week

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

On the economic data front, private sector PMIs and core durable goods orders for February and March were in focus

It was a mixed set of numbers in the week.

According to prelim figures, both manufacturing and service sector activity picked up in March.

The all-important services PMI increased from 59.8 to 60.0, with the manufacturing PMI rising from 58.6 to 59.0.

On the negative, however, was an unexpected fall in core durable goods orders and durable goods orders.

In February, core durable goods orders fell by 0.9%, with durable goods orders falling by 1.1%, month-on-month.

While the stats were mixed, FED Chair Powell delivered Dollar a strength and a pickup in U.S Treasury yields during 2-days of testimony to lawmakers.

Powell is finding it hard to talk down the U.S economy following the FOMC projections.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 8 basis points to 3.17% in the week. This time last year, rates had stood at 3.50%. The average fee held steady at 0.7 points.
  • 15-year fixed rates rose by 5 basis points 2.45% in the week. Rates were down by 47 basis points from 2.92% a year ago. The average fee fell from 0.7 points to 0.6 points.
  • 5-year fixed rates also rose by 5 basis points 2.84%. Rates were down by 50 points from 3.34% a year ago. The average fee fell from 0.3 points to 0.2 points.

According to Freddie Mac,

  • During the course of the pandemic, the home has become more important than ever. This has driven strong demand, with buyers outnumbering sellers.
  • Since January, mortgage rates have increased half a percentage point from historical lows and home prices have risen.
  • This has left potential homebuyers with less purchasing power.
  • Unfortunately, this has disproportionately affected the low end of the market, where supply is the slimmest.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.28% to 3.36%. Points increased from 0.41 to 0.42 (incl. origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by FHA increased from 3.25% to 3.35%. Points rose from 0.38 to 0.41 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.34% to 3.40%. Points increased from 0.40 to 0.43 (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 2.5% in the week ending 19th March. In the previous week, the index had fallen by 2.2%.

The Refinance Index decreased by 5% from the previous week and was 13% lower than the same week a year ago. The index had fallen by 4% in the week prior.

In the week ending 19th March, the refinance share of mortgage activity decreased from 62.9% to 60.9%. In the previous week, the share had fallen from 64.5% to 62.9%.

According to the MBA,

  • Mortgage rates have now risen 50 basis points since the beginning of the year, shutting off refinance incentives for many borrowers.
  • Refinance activity dropped to its slowest pace since September 2020.
  • Mortgage rates have moved higher in tandem with Treasury yields, as the outlook for the U.S economy continues to brighten.
  • Faster vaccines and an easing of pandemic-related restrictions have supported the more bullish outlook.
  • Purchase applications were strong over the week. Households seeking more living space and younger households looking to enter the market drove demand.
  • The purchase index increased for a 4th consecutive week and was up 26% from last year’s pace.
  • Loan sizes were also on the rise once more.

For the week ahead

It’s another relatively quiet first half of the week on the U.S economic calendar once more. Key stats include consumer confidence and ADP Nonfarm employment change figures for March.

The markets are bullish now about the U.S economy. So, a deterioration in consumer confidence and labor market conditions could derail that outlook.

All-in-all, however, the numbers would need to be dire to shift sentiment and materially hit mortgage rates.

From elsewhere, private sector PMIs from China will also draw interest.

Geopolitical risk is also back on the table as China retaliates, targeting major western brand names…

U.S Mortgage Rates Rise for a 5th Consecutive Week

Mortgage rates were on the rise for a 5th consecutive week in the week ending 18th March. Following a 3-basis points rise from the week prior; 30-year fixed rates rose by a further 4 basis points to 3.09%.

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

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

Notably, however, it was just the third plus 3% week since July of last year.

Economic Data from the Week

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

On the economic data front, manufacturing numbers from NY State, retail sales, and industrial production figures were in focus.

It was a mixed bag on the data front.

In March, the NY Empire State Manufacturing Index rose from 12.1 to 17.4, beating forecasts.

It was the only positive stat, however, with both retail sales and industrial production disappointing.

In February, core retail sales fell by 1.7%, with retail sales sliding by 3.0%.

Things were not much better on the production side, with industrial production falling by 2.2% in February.

From elsewhere, economic data from China impressed once more at the start of the week.

Retail sales surged by 33.8%, with industrial production jumping by 35.1%.

Ultimately, however, it was the FED that delivered a 5th consecutive weekly rise in mortgage rates.

While the FOMC economic projections pointed to a hold on rates until 2023, growth and inflation projections were particularly hawkish.

Freddie Mac Rates

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

  • 30-year fixed rates increased by 4 basis points to 3.09% in the week. This time last year, rates had stood at 3.65%. The average fee increased from 0.6 points to 0.7 points.
  • 15-year fixed rates rose by 2 basis points 2.40% in the week. Rates were down by 66 basis points from 3.06% a year ago. The average fee rose from 0.6 points to 0.7 points.
  • 5-year fixed rates also rose by 2 basis points 2.79%. Rates were down by 32 points from 3.11% a year ago. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • As expected, mortgage rates continued to inch up but are still hovering around 3%, keeping interested buyers in the market.
  • Residential construction has declined for 2 consecutive months, however.
  • Given the very low inventory environment and competition among potential homebuyers, it is a challenging reality, especially for first-time buyers.

Mortgage Bankers’ Association Rates

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

  • Average interest rates for 30-year fixed to conforming loan balances increased from 3.26% to 3.28%. 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 3.20% to 3.25%. Points rose from 0.37 to 0.38 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances remained unchanged at 3.34%. Points decreased from 0.50 to 0.40 (incl. origination fee) for 80% LTV loans.

Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, decreased by 2.2% in the week ending 12th March. In the previous week, the index had fallen by 1.3%.

The Refinance Index decreased by 4% from the previous week and was 39% lower than the same week a year ago. The index had fallen by 5% in the week prior.

In the week ending 12th March, the refinance share of mortgage activity decreased from 64.5% to 62.9%. In the previous week, the share had fallen from 67.5% to 64.5%.

According to the MBA,

  • Mortgage activity was mixed last week, with the run-up in rates reducing incentives for potential refinance borrowers.
  • The 30-year fixed rate increased to its highest level since June 2020.
  • After reaching a recent high in the last week of January, the refinance index has fallen 26% to its lowest level since Sept-2020.
  • Rates have jumped 36 basis points since the end of January, contributing to a fall in refinance activity across all loan types.
  • The purchase market helped offset the slump in refinances, with activity up 5% from a year ago.
  • Labor market conditions and demographic factors delivered support amidst ongoing supply and affordability constraints.

For the week ahead

It’s a relatively quiet first half of the week on the U.S economic calendar once more. Key stats include core durable goods and prelim private sector PMI figures for March.

Expect the services PMI and core durable goods orders to be the key driver.

On the monetary policy front, FED Chair Powell is scheduled to speak on Monday and give Testimony on Tuesday and Wednesday. Expect any chatter on the economic outlook and monetary policy to influence.

Powell will need to deviate from last week’s script, however, to make a material impact.

From elsewhere, private sector PMIs from the Eurozone will also provide yields with direction mid-week.