U.S mortgage rates saw a modest increase according to Freddie Mac. With FED monetary policy now hinged on economic data, another spike in nonfarm payrolls could push rates back to 3%...
Mortgage rates rose modestly, with 30-year fixed rates increasing by just 2 basis points, reversing a 2 basis points fall from the week prior. The weekly increase was just the 5th in 10-weeks.
In the week ending 23rd September, 30-year fixed rates rose by 2 basis points to 2.88%.
30-year mortgage rates have risen just once beyond the 3% mark Since 21st April.
Compared to this time last year, 30-year fixed rates were down by 2 basis points.
30-year fixed rates were still down by 206 basis points since November 2018’s last peak of 4.94%.
It was a relatively quiet first half of the week, with housing sector data in focus.
In August, building permits jumped by 6%, with new housing starts rising by 3.9%. Following a 6.2% sliding in housing starts in July, a pickup in new inventories would ease inventory shortages.
Existing home sales declined by 2.0%, reversing a 2.2% increase from July.
The numbers had a muted impact on yields and mortgage rates, however, with the FED in focus on Wednesday.
On Wednesday, the FED left monetary policy unchanged and also held back on committing a date to begin tapering. Interest rate projections and the FOMC dot plot chart revealed a divided Committee, with some supporting rate hikes next year.
The weekly average rates for new mortgages as of 23rd September were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 17th September, 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, increased by 4.9% in the week ending 17th September. In the previous week, the index had increased by 0.3%.
The Refinance Index increased by 7% and was 5% lower than the same week one year ago. The index had declined by 3% in the week prior.
In the week ending 17th September, the refinance share of mortgage activity increased from 64.9% to 66.2%. The share had fallen from 66.8% to 64.9% in the previous week.
According to the MBA,
It’s another quiet week ahead on the economic data front, though we can expect the numbers to influence yields.
Durable and core durable goods orders are out along with consumer confidence figures.
In the week, house price and pending home sales figures are also due out but should have a muted impact on mortgage rates.
Following last week’s interest rate projections, expect FOMC member chatter to also draw plenty of interest in the week.
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.