The uptrend in COVID-19 cases led to a 4th consecutive weekly decline in mortgage rates. In the week ahead, consumer confidence and the FED will be key drivers alongside COVID-19 numbers.
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%.
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.
The weekly average rates for new mortgages as of 22nd July were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 16th July, the rates were:
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,
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.
With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.