US mortgage rates remain stable ahead of the Jackson Hole Symposium
Mortgage rates fell after falling just 2 had risennd Time in 7 weeks in the previous week.
In the week until 19NS In August, 30-year fixed interest rates fell 1 basis point to 2.86%. Mortgage rates had risen 10 basis points the week before.
30-year mortgage rates have risen above the 3% mark only once.NS April.
Compared to this point in the previous year, the 30-year fixed interest rate has fallen by 13 basis points.
30-year fixed rates are still down 208 basis points from their last high of 4.94% in November 2018.
Economic data of the week
It was a relatively busy first half of the week on the economic data front. Key statistics from the United States included NY state manufacturing numbers, industrial production, and retail sales.
The statistics were skewed into the negative, with retail sales falling 1.0% in July, versus a projected decline of 0.3%. In June retail sales were up 0.7%.
In August, the NY Empire State Manufacturing Index fell from 43.0 to 18.3% from a forecast decline to 29.0.
On the monetary policy front, the minutes of the FOMC showed an intensified debate on tapering the asset purchase program. After impressive NFP payrolls, FOMC members chatter weighed on riskier assets during the week, with members speaking of the need to act.
In other countries, economic data from China at the beginning of the week heightened concerns about the economic recovery.
Investments in property, plant and equipment rose 6.4% in July compared to the previous year, compared with 8.3% in June. Retail sales rose 8.5% from 12.6% in June.
Freddie Mac Awards
The weekly average rates for new mortgages as of April 19NS August were quoted by Freddie Mac to be:
- 30 year fixed rates fell 1 basis point for the week to 2.86%. Last year around this time the rates had been 2.99%. The average fee remained unchanged at 0.7 points.
- 15-year time deposits rose 1 basis point 2.16% for the week. Interest rates fell 38 basis points from 2.54% in the previous year. The average fee decreased from 0.7 points to 0.6 points.
- The five-year fixed interest rate fell 1 basis point to 2.43%. Interest rates were down 48 points from 2.91% a year ago. The average fee remained constant at 0.3 points.
According to Freddie Mac,
- Mortgage rates stayed relatively constant over the week. Housing is in a similar phase of the business cycle as many other consumer goods.
- While there is strong latent demand, low supply has led to a rise in prices as scarcity limits the sales activity that would otherwise take place.
Counseling the Mortgage Bankers Association
For the week until 13NS August the Prices became:
- The average interest rate for 30-year fixed bonds with corresponding loan balances rose from 2.99% to 3.06. Point increase from 0.30 to 0.34 (including issuing fee) for 80% LTV loans.
- The average 30-year FHA-secured fixed-rate mortgage rate increased from 3.06% to 3.15%. For 80% LTV loans, the points rose from 0.27 to 0.31 (including the issuing fee).
- The 30-year average jumbo credit balance increased from 3.15% to 3.19%. The points fell from 0.29 to 0.26 (including issuing fee) for 80% LTV loans.
The weekly numbers released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of the volume of mortgage loan applications, was down for the week of Jan.NS August. The week before, the index was up 2.8%.
The refinancing index fell 5% and was 8% lower than a week earlier. The index was up 3% in the previous week.
In the week until 13NS In August, the refinancing share of mortgage business fell from 68.0% to 67.3%. The share had risen from 67.6% to 68.0% in the previous week.
According to the MBA,
- Mortgage rates were at their highest level in about a month, with the 30-year fixed rate rising to over 3.0%.
- Interest rates followed a broad spike in government bond yields last week that started high with the strong employment report in July before slowing in response to weaker consumer sentiment and concerns about COVID-19.
- Results have been mixed on purchase requests, and average loan sizes remain close to record highs despite a weekly second-tier decline.
- This is a lingering sign that sales prices are still elevated due to fierce competition that is leading to accelerated home price growth.
For the coming week
The focus is on the preliminary private sector PMIs for August on Monday and the core durable goods orders on Tuesday.
Expect the purchasing managers’ index for services and core durable goods orders to be crucial in the economic calendar.
On the monetary front, the talk by FOMC members ahead of the Fed’s Jackson Hole Symposium will also have a significant impact on returns.