Mortgage rates stabilized in the week ending 11th March. 30-year fixed rates rose by 4 basis points, following on from a 2 basis point rise from the previous week. The 4 basis point rise took 30-year rates to 4.12% according to figures released by Freddie Mac.
Following the weekly uptick, 30-year fixed rates stood 30 basis points below levels from 12-months ago.
More significantly, 30-year fixed rates have fallen by 82 basis points since last November’s most recent peak of 4.94%.
Economic Data from the Week
Economic data released through the last week included factory orders, job openings, and inflation figures through to Wednesday.
Softer inflation figures provided support to the FED’s shift in policy and plan to hold rates unchanged for the current year. Job openings were also on the softer side, but not to a level that would raise red flags. Of greatest significance at the start of the week was a fall in industrial production, though this had been forecasted.
Outside of the numbers, the FED released the FOMC meeting minutes on Wednesday, which provided support for riskier assets.
Sentiment through the week improved, with even a downward revision to growth forecasts by the IMF having little impact on market risk appetite.
Freddie Mac Rates
The weekly average rates for new mortgages as of 11th April were quoted by Freddie Mac to be:
- 30-year fixed rates rose 4 basis points to 4.12% in the week. Rates were down from 4.42% from a year ago. The average fee held steady at 0.5 points.
- 15-year fixed rates also rose by 4 basis points to 3.60% in the week. Rates were down from 3.87% from a year ago. The average fee held steady at 0.4 points.
- 5-year fixed rates increased by 14 basis points to 3.80% in the week. Rates increased by 19 basis points from last year’s 3.61%. The average fee remained unchanged at 0.4 points.
According to Freddie Mac, mortgage application demand eased slightly following the previous week’s 2ndlargest weekly increase in applications over the last 12-months.
In spite of the recent uptick in mortgage rates, Freddie Mac expects mortgage rates to remain low, in line with 10-year treasury yields, supporting homebuyer demand in the coming months.
Mortgage Bankers’ Association Rates
For the week ending 5th April, rates were quoted to be:
- Average interest rates for 30-year fixed, backed by the FHA, increased from 4.41% to 4.42%. Points remained unchanged at 0.48 (incl. origination fee) for 80% LTV loans.
- Average interest rates for 30-year fixed with conforming loan balances increased from 4.36% to 4.40%. Points increased from 0.44 to 0.47 (incl. origination fee) for 80% LTV loans.
- Average 30-year rates for jumbo loan balances increased from 4.21% to 4.28%. Points increased from 0.25 to 0.28 (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, fell by 5.6% in the week ending 5th April. The pullback came off the back of an 18.6% surge in the week ending 29th March.
The Refinance Index slid by 11% in the week ending 5th April. The slide partially reversed a 39% jump in the week ending 29th March.
The share of refinance mortgages fell from 47.4% to 44.1%, partially reversing an increase from 40.4% to 47.4% in the week prior.
The Mortgage Bankers Association also released its Builder Application Survey (BAS) for March. According to the report released on 9th April,
- Mortgage applications for new home purchases increased by 7% year-on-year. Month-on-month, applications jumped by 19%.
- The report noted that the average loan size was on a downward trend, suggesting that builders were favoring production of lower-priced homes.
- Strong labor market conditions, rising wages, and lower mortgage rates supported the increase in demand.
For the week ahead
Economic data due out through the first half of the week includes NY State Manufacturing and industrial production figures on Monday and Tuesday. Ahead of the mortgage rate calculations trade data out of the U.S will also have an influence on yields.
From outside of the U.S, 1st quarter GDP and industrial production figures out of China will also need to be considered.
Away from the stats, corporate earnings will be in full swing following JPMorgan Chase and Wells Fargo results on Friday.
The focus early on remains in the financial sector. Key earnings releases through the week include those for Citigroup (Monday); Goldman Sachs (Monday); Bank of America (Tuesday); Netflix Inc. (Tuesday); Morgan Stanley (Wednesday); and American Express (Thursday).