U.S. mortgage rates drop for third week as COVID-19 creates uncertainty

by



[ad_1]

Mortgage rates fell for a third consecutive week in the week ending the 15the July

After falling 8 basis points from the previous week, fixed 30-year rates fell 2 basis points to 2.88%.

Since 21st In April, 30-year mortgage rates had risen only once past the 3% mark before the current decline.

Compared to the same period last year, fixed 30-year rates fell by 10 basis points.

Fixed 30-year rates were still down 206 basis points since the last peak in November 2018 at 4.94%.

Economic data of the week

It was a busier first half of a week on the US economic calendar.

Key stats included consumer and wholesale inflation figures for June.

The statistics were biased towards the positive, weighing on riskier assets during the week.

US inflationary pressures accelerated markedly at the end of the quarter, raising concerns about Fed policy and the economic outlook.

In June, the annual inflation rate accelerated from 5.0% to 5.4%, with the core inflation rate accelerating from 3.8% to 4.5%.

Wholesale inflationary pressures have also increased, indicating a further rise in consumer prices in the near term. In June, the annual wholesale inflation rate accelerated from 6.8% to 7.3%.

As statistics weighed on riskier assets, Fed Chairman Powell’s testimony to lawmakers was aimed at easing market tensions midweek.

The Fed president spoke of the Fed’s desire to let inflation escalate in the short term in order to avoid making the wrong policy decision.

Ultimately, however, market concerns about the resilience of the global economic recovery, a continued rise in new COVID-19 cases around the world, and inflation weighed on returns.

Freddie Mac Pricing

Average weekly rates for new mortgages on the 15the July were cited by Freddie mac to be:

According to Freddie Mac,

  • The summer mortgage rate swoon continues as 30-year fixed rates fall by a 3rd consecutive week.

  • From a peak of 3.18% in April, rates have fallen 30 basis points.

  • While the drop is not significant, it provides modest relief to borrowers buying in a market with strong home appreciation and limited inventory.

Mortgage Bankers Association rate

For the week ending 9e July, the rates have been:

  • The 30-year average interest rates set on compliant loan balances declined from 3.15% to 3.09%. Points increased from 0.38 to 0.37 (including origination fees) for LTV loans at 80%.

  • The 30-year average fixed mortgage rates guaranteed by the FHA fell from 3.17% to 3.15%. Points increased from 0.32 to 0.29 (including origination fees) for LTV loans at 80%.

  • The 30-year average rates for jumbo loan balances have declined from 3.20% to 3.16%. Points increased from 0.28 to 0.27 (including origination fees) for LTV loans at 80%.

Weekly figures released by the Mortgage Bankers Association showed that the Composite Market Index, which is a measure of mortgage application volume, jumped 16.0% in the week ending the 9th.e July. The previous week, the index had fallen 1.8%.

The refinancing index jumped 20% and was 29% lower than the same week a year ago. The index had fallen 2% the week before.

In the week ending 9e In July, the refinancing share of mortgage activity rose from 61.6 to 64.1%. The share had fallen from 61.9% to 61.6% the previous week.

According to the MBA,

  • Aggregate demands soared last week, heavily driven by refinancing as rates fell again.

  • Treasury yields have tended to decline over the past month as investors remain concerned about the COVID-19 variant and slowing economic growth.

  • Lower mortgage rates for a 2sd week in a row left 30-year fixed rates at their lowest level since February 2021.

  • While purchase requests increased last week, loan amounts declined to their lowest level since January-2021.

For the coming week

It is a particularly calm first half of the week. Economic data is limited to housing sector statistics which should have a moderate impact on yields.

The lack of statistics will leave COVID-19 updates and discussions from Capitol Hill to provide returns with direction at the start of the week.

This article originally appeared on FX Empire

More from FXEMPIRE:

[ad_2]

Source link