Mortgage rates held steady following a previous week slide to a 13th record low of the year. In the week ending 26th November, 30-year fixed rates remained unchanged following a 12 basis points slide in the week prior.
Compared to this time last year, 30-year fixed rates were down by 96 basis points.
30-year fixed rates were also down by 222 basis points since November 2018’s most recent peak of 4.94%.
Economic Data from the Week
Economic data was on the busier side in the 1st half of the week.
Prelim November private sector PMIs, consumer confidence, the weekly jobless claims, and October core durable goods, personal spending, and inflation figures were in focus.
While private PMI numbers impressed, consumer confidence and labor market numbers disappointed.
Also positive, however, was a further increase in core durable goods orders and personal spending.
While the stats delivered mixed results, with labor market figures raising more concerns, progress towards a COVID-19 vaccine was market risk positive.
Freddie Mac Rates
The weekly average rates for new mortgages as of 26th November were quoted by Freddie Mac to be:
- 30-year fixed rates remained unchanged at 2.72% in the week. Rates were down from 3.68% from a year ago. The average fee remained steady at 0.7 points.
- 15-year fixed rates also remained unchanged at 2.28% in the week. Rates were down from 3.15% compared with a year ago. The average fee held steady at 0.6 points.
- 5-year fixed rates jumped by 31 basis points to 3.16% in the week. Rates were down by 27 points from last year’s 3.43%. The average fee held steady at 0.3 points.
According to Freddie Mac,
- Mortgage rates remained at record lows and, while that has fueled a refinance boom, higher-income borrowers have driven the boom.
- Lower-and middle-income borrowers are leaving money on the table by not taking advantage of low rates.
- Demand from homebuyers continues to surge and it has created a seller’s market. Inventories sit at record lows and house prices are rising, which is beginning to offset the benefits of low rates.
Mortgage Bankers’ Association Rates
For the week ending 20th November, rates were quoted to be:
- Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.11% to a survey low of 2.99%. Points fell from 0.37 to 0.27 (incl. origination fee) for 80% LTV loans.
- Average interest rates for 30-year fixed with conforming loan balances fell from 2.99% to a survey low of 2.92%. Points decreased from 0.37 to 0.35 (incl. origination fee) for 80% LTV loans.
- Average 30-year rates for jumbo loan balances increased from 3.11% to 3.18%. Points decreased from 0.28 to 0.27 (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, increased by 3.9% in the week ending 20th November. In the week prior, the Index had slipped by 0.3%.
The Refinance Index increased by 5% and was 79% higher than the same week a year ago. In the week prior, the Index had decreased by 2%.
The refinance share of mortgage activity rose from 69.8% to 71.1%. The share had fallen from 70.0% to 69.8% in the week prior.
According to the MBA,
- Weekly mortgage volatility has emerged again, as markets respond to fiscal policy uncertainty and surge in new COVID-19 cases.
- The decline in rates ignited borrower interest, with applications for both home purchases and refinances rising on a weekly and annual basis.
- Both the refinance index and the share of refinance applications were at their highest levels since April.
- Purchase activity has surpassed year-ago levels for over 6-months.
For the week ahead
It’s a relatively busy 1st half of the week on the U.S economic calendar.
Key stats include ISM Manufacturing and Non-Manufacturing PMIs for November and ADP nonfarm employment change figures.
While we will expect the numbers to influence, the news wires will also provide U.S Treasuries with direction in the week.
Away from the economic calendar, U.S politics, COVID-19 news updates, and Brexit will be key areas of interest.