image

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.


Source link

0 0 votes
Article Rating

S’abonner
Notifier de
0 Commentaires
Commentaires en ligne
Afficher tous les commentaires
Reset Password

Avertissement sur les risques :

Le trading peut vous exposer à des risques de pertes supérieures aux dépôts et ne convient qu’à une clientèle avisée ayant les moyens financiers de supporter un tel risque. Les CFD sont des instruments complexes et présentent un risque élevé de perte rapide en capital en raison de l’effet de levier. Entre 74 et 89% des comptes de clients de détail perdent de l’argent lors de la négociation de CFD. Vous devez vous assurer que vous comprenez comment les CFD fonctionnent et que vous pouvez vous permettre de prendre le risque élevé de perdre votre argent. Ce site n’est en aucun cas une offre de conseil en investissement ni une incitation quelconque à acheter ou vendre des instruments financiers. Trader le Forex et/ou les CFD’s implique un niveau de risque élevé, et peut ne pas être approprié car vous pouvez subir des pertes supérieures à votre dépôt. L’effet de levier peut être en votre défaveur.

Vous devez être conscient et avoir une compréhension complète de tous les risques associés au marché et au trading. Le site Union-trader.com peut être amené à produire des commentaires d’ordre général, ce qui ne constitue pas des conseils en investissement et ne doit pas être interprété comme tel.

Veuillez recourir aux conseils d’un conseiller financier extérieur. Le site Union-trader.com décline toute responsabilité pour les erreurs, inexactitudes ou omissions et ne garantit pas l’exactitude ou le caractère complet des informations, textes, graphiques, liens ou autres éléments contenus dans cette documentation. Toute information et toute mise à disposition sur le site ont un caractère privé.