Mortgage rates slipped to yet another all-time low in the week ending 22nd October. Following a 6 basis point fall in the week prior, the 30-year fixed rate fell by 1 basis point to 2.80%.
Compared to this time last year, 30-year fixed rates were down by 95 basis points.
30-year fixed rates were down by 214 basis points since November 2018’s most recent peak of 4.94%.
Economic Data from the Week
Economic data was on the lighter side in the 1st half of the week.
Stats were limited to housing sector data for September, which was skewed to the positive in the week.
Building permits jumped by 5.2%, reversing a 0.5% fall in August, with housing starts rising by 1.9%. In August, housing starts had slumped by 6.7%.
From the week prior, stats were also skewed to the positive, supporting U.S Treasury yields.
Concerns over labor market conditions lingered, however, with initial jobless claims rising to 898k in the week ending 9th October.
From China, 3rd quarter GDP figures, retail sales, industrial production, and unemployment figures were also in focus.
The stats were skewed to the positive, with China’s economic recovery continuing through the 3rd quarter.
Away from the economic calendar, however, a failure to deliver a U.S stimulus bill and surge in new COVID0-19 cases weighed on yields in the week.
As a result of the surge in new COVID-19 cases across Europe, containment measures raise further uncertainty over the economic outlook.
Freddie Mac Rates
The weekly average rates for new mortgages as of 22nd October were quoted by Freddie Mac to be:
30-year fixed rates decreased by 1 basis points to 2.80% in the week. Rates were down from 3.75% from a year ago. The average fee remained unchanged at 0.6 points.
15-year fixed rates fell by 2 basis points to 2.33% in the week. Rates were down from 3.18% compared with a year ago. The average fee rose from 0.5 points to 0.6 points.
5-year fixed rates declined by 3 basis points to 2.87% in the week. Rates were down by 53 points from last year’s 3.40%. The average fee increased from 0.2 points to 0.3 points.
According to Freddie Mac,
Mortgage rates remain very low, providing an opportunity for homebuyers who have not already taken advantage of the low mortgage rate environment.
Rates today are on average more than a full percentage point lower than rates over the last 5-years
Mortgage Bankers’ Association Rates
For the week ending 16th October, rates were quoted to be:
Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.12% for a 2nd consecutive week. Points also remained unchanged 0.35 (incl. origination fee) for 80% LTV loans.
Average interest rates for 30-year fixed with conforming loan balances increased from 3.00% to 3.02%. Points rose from 0.32 to 0.36 (incl. origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances increased from 3.30% to 3.33%. Points decreased from 0.35 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, slipped by 0.6% in the week ending 16th October. In the week prior, the index had decreased by 0.7%.
The Refinance Index rose by 0.2% from the previous week and was 74 percent higher than the same week a year ago. In the week prior, the index had slipped by 0.3%.
The refinance share of mortgage activity increased from 65.6% to 66.1%. In the week prior, the index had risen from 65.4% to 65.6%.
According to the MBA,
Mortgage rates rose to the highest since late September.
Despite the uptick in rates, refinance activity held steady, with FHA refinance applications posting a 17.6% increase.
Homebuyer demand remains strong this fall, while purchase applications fell by 2%.
With the ongoing housing sector recovery and low rate environment, both purchase and refinance applications remained robust compared with a year ago.
Refinance applications were up 74%, with purchase applications up 26% from a year ago.
For the week ahead
It’s a busier 1st half of the week on the U.S economic calendar.
Key stats include September durable and core durable goods orders and October consumer confidence figures.
While the stats will provide direction in the week, U.S politics and COVID-19 will also influence throughout the week.
Any updates from Capitol Hill and U.S election polls will provide direction. A further surge in new COVID-19 cases, however, would likely raise further concerns over the economic recovery.
This article was originally posted on FX Empire