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Mortgage rates fell back to levels below 3% after breaking the 2 marksd time since 21st April.
In the week ending 7the October, 30-year fixed rates fell 2 basis points to 2.99%.
Compared to the same period last year, 30-year fixed rates increased by 12 basis points.
30-year fixed rates are still down 195 basis points since the last peak in November 2018 at 4.94%.
Economic data of the week
The start of the week was busier on the US economic data front. Key statistics included factory orders, the service sector PMI and ADP non-farm employment figures.
The statistics were biased towards the positive before the very important labor market data for the week ended.
Factory orders rose 1.2% in August, following a 0.7% increase in July. The market’s preferred ISM non-manufacturing PMI was also bullish, rising from 61.7 to 61.9.
According to the ADP, the non-farm payroll increased by 568,000 in September against an expected increase of 428,000. In August, the non-farm payroll had increased by 340k according to the ADP …
Freddie Mac Pricing
Average weekly rates for new mortgages at 7e October were cited by Freddie mac to be:
According to Freddie Mac,
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Mortgage rates continue to hover around 3% this week again due to growing uncertainties in the economic and financial markets.
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Unfortunately, with the expectation that mortgage rates and house prices will continue to rise, competition remains strong and housing affordability decreases.
Mortgage Bankers Association rate
For the week ending 1st October, the rates were:
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The 30-year average interest rates set with compliant loan balances fell from 3.10% to 3.14%. Points increased from 0.34 to 0.35 (including origination fees) for LTV loans at 80%.
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The 30-year average fixed mortgage rates backed by the FHA fell from 3.09% to 3.12%. Points increased from 0.25 to 0.31 (including origination fees) for LTV loans at 80%.
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The 30-year average rates for jumbo loan balances fell from 3.14% to 3.20%. Points increased from 0.33 to 0.27 (including origination fees) for LTV loans at 80%.
Weekly figures released by the Mortgage Bankers Association showed the Composite Market Index, which is a measure of mortgage application volume, fell 6.9% in the week ending 1st October. The previous week, the index had fallen 1.1%.
The refinancing index fell 10.0% and was 16% lower than the same week a year ago. The index had fallen 1.0% the week before.
In the week ending 1st October, the refinancing share of mortgage business increased from 66.4% to 64.5% of total applications. The share had increased from 66.2% to 66.4% of total claims the previous week.
According to the MBA,
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Mortgage applications for refinancing fell to their lowest level in 3 months, while the 30-year fixed rate hit its highest level since July.
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Higher rates reduce the incentive for borrowers to refinance.
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Purchasing activity also fell, while the average loan balance did not decline from the $ 410,000 reached the week before.
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With housing prices appreciating and selling prices remaining very high, demands for higher balances, conventional loans still dominate the business mix.
For the coming week
It’s another relatively busy first half of a week on the US economic calendar.
Key stats include Jolts’ job postings and, more importantly, September inflation numbers.
While the non-farm payroll disappointed last week, a further resumption of inflationary pressures could force the Fed’s hand. Expect yields to rebound and push mortgage rates north if inflation picks up again.
This article originally appeared on FX Empire
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