Mortgage rates were on the move in the 2nd week of February, after barely shifting for 3 consecutive weeks.
In the week ending 10th February, 30-year fixed rates jumped by 14 basis points to 3.69%. 30-year fixed rates had remained unchanged at 3.55% in the week prior. As a result, 30-year fixed rates held above the 3% mark for a 13th consecutive week.
Compared to this time last year, 30-year fixed rates were up by 96 basis points.
30-year fixed rates were still down by 125 basis points, however, since November 2018’s last peak of 4.94%.
Economic Data from the Week
It was a quiet first half of the week, with economic data limited to December trade data. The numbers had a muted impact on U.S Treasury yields ahead of inflation figures on Thursday. January nonfarm payrolls from the previous week supported the rise in mortgage rates in the week.
Freddie Mac Rates
The weekly average rates for new mortgages as of 10th February were quoted by Freddie Mac to be:
30-year fixed rates jumped by 14 basis points to 3.69% in the week. This time last year, rates had stood at 2.73%. The average fee remained unchanged at 0.8 points.
15-year fixed rates surged by 16 basis points to 2.93% in the week. Rates were up by 74 basis points from 2.19% a year ago. The average fee rose from 0.7 points to 0.8 points.
5-year fixed rates increased by 9 basis point to 2.80%. Rates were up by 1 basis point from 2.79% a year ago. The average fee remained unchanged at 0.3 points.
According to Freddie Mac,
Economy normalization continues, with mortgage rates surging to the highest level since the start of the COVID-19 pandemic.
Freddie Mac expects rate increases to continue due to high inflation and strong labor market conditions.
The combination will likely have an adverse impact on homebuyer demand.
Mortgage Bankers’ Association Rates
For the week ending 4th February, the rates were:
Average interest rates for 30-year fixed with conforming loan balances rose from 3.78% to 3.83%. Points decreased from 0.41 to 0.40 (incl. origination fee) for 80% LTV loans.
Average 30-year fixed mortgage rates backed by FHA increased from 3.86% to 3.93%. Points decreased from 0.55 to 0.54 (incl. origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances increased from 3.59% to 3.62%. Points rose from 0.31 to 0.35 (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, slid by 8.1% in the week ending 4th February. The Index had jumped by 12% in the previous week.
The Refinance Index slid by 7% from the previous week and was 52% lower than the same week a year ago. In the week prior, the Index had surged by 18%.
The refinance share of mortgage activity decreased from 57.3% to 56.2%. In the previous week, the share had increased from 55.8% to 57.3%.
According to the MBA,
Mortgage rates continued to move higher, tracking the 10-year yield, as the markets responded to growing inflationary pressures.
The FED and other key global central banks signaled that they will start removing accommodative policies, driving yields higher.
Purchase activity slowed, while the average loan size hit another record high at $446,000.
For the week ahead
It’s a busier start to the week for the U.S markets. Wholesale inflation figures will be in focus early in the week ahead of retail sales data on Wednesday. Expect last week’s U.S inflation figures and this week’s stats to provide mortgage rates with further direction.
This article was originally posted on FX Empire