Mortgage rates were again relatively flat, with the 30-year fixed rate falling by just 2 basis points. After an increase of 1 basis point in the previous week, rates fell by 6e time in 11 weeks.
In the week ending in 16e In September, the 30-year fixed rate fell by 2 basis points to 2.86%.
30-year mortgage rates have risen above 3% only once since 21NS April.
Compared to last year at this time, the 30-year fixed rate was only 1 basis point lower.
The 30-year fixed rate was still down 208 basis points since its last November 2018 peak of 4.94%.
Economic data of the week
It was a relatively busy first half of the week, with the inflation figures for August taking center stage on Tuesday.
Due to the softer inflation figures, the mortgage interest rate was fixed during the week.
In August, annual US core inflation fell from 4.3% to 4.0%. Although inflation was softer, the ongoing spike in inflation caused the FED to taper this year.
On Wednesday, industrial production and NY Empire State Manufacturing data failed to increase yields despite positive data.
The NY Empire State Manufacturing Index climbed from 18.3 to 34.3 in September. Industrial production rose 0.4% in August, after a 0.8% increase in July.
While US statistics were optimistic, economic data from China raised even more red flags about China’s economic recovery.
In August, industrial production rose 5.3% year-on-year, down from 6.4% in July. Fixed asset investment also disappointed, rising 8.9% from 10.3% in July. Both did not live up to the predictions.
Freddie Mac Rates
The weekly average rates for new mortgages from 16e September were quoted by Freddie Mac to be:
According to Freddie Mac,
Mortgage rates were flat, reflecting the markets’ view that the outlook for the economy has declined as a result of the latest spike in new cases of COVID-19.
However, fundamental changes are taking place in the economy, which are likely to lead to significant investment and new post-pandemic economic models that will stimulate economic growth.
Such changes include increased migration, continuation of remote working, increased use of automation and a focus on a more energy efficient and resilient economy.
Rates mortgage banking association
For the week ending in 10e September, the prices goods:
Average interest rates for 30-year fixed with compliant loan balances remained unchanged at 3.03%. Points decreased from 0.33 to 0.32 (incl. origination fee) for 80% LTV loans.
The average 30-year fixed mortgage rate, secured by FHA, fell from 3.07% to 3.04%. Points decreased from 0.30 to 0.27 (incl. origination fee) for 80% LTV loans.
The average 30-year rate for jumbo loans fell from 3.14% to 3.13%. Points decreased from 0.30 to 0.21 (incl. origination fee) for 80% LTV loans.
Weekly figures from the Mortgage Bankers Association show that the Market Composite Index, a measure of mortgage application volume, rose 0.3% in the week ending 10.e September. In the previous week, the index had fallen by 1.9%
The refinancing index fell 3% and was 3% lower than the same week a year ago. The index had also fallen 3% the week before.
In the week ending in 10e In September, the mortgage refinancing share fell from 66.8% to 64.9%. The stock remained unchanged the week before at 66.8%.
According to the MBA,
Purchase requests, after adjusting for the impact of Labor Day, rose more than 7% to the highest level since April 21.
Compared to September 2020, which was in the midst of a significant rebound in home purchases, the number of applications decreased by 11%.
The average loan size for a purchase application rose to $396,800, with a competitive purchase market pushing up sales prices.
By contrast, refinancing applications fell to their lowest pace since early July.
For the coming week
It’s a quieter week ahead in terms of economic data. Economic data is limited to data on the housing sector, which should have a moderate effect on yields.
The market’s focus will be on the FOMC’s monetary policy decision and forecasts expected late Wednesday.
An aggressive FED would push interest rates north, which should support a rebound in mortgage rates in the coming weeks.
This article was originally posted on FX Empire