US Mortgage Rates Fall Again Amid Concerns To Hold COVID-19 Yields



Mortgage rates resumed their downward trend, with rates falling for 5 every 6 weeks.

For the week ending August 5, 30-year fixed rates fell 3 basis points to 2.77%. Mortgage rates rose 2 basis points the week before.

Rates on 30-year mortgages have only exceeded 3% once since the age of April.

Compared to last year, 30-year fixed rates are down 11 basis points.

30-year fixed rates are still down 217 basis points from the last peak in November 2018 of 4.94%.

Economic data for the week

On the US economic calendar, it was a relatively busy first half of the week.

Economic data included private sector PMI and nonfarm payrolls data for July.

In terms of economic data, the situation was mixed.

While manufacturing slowed in July, activity in the services sector rose sharply at the start of the quarter.

The ISM Manufacturing PMI fell from 60.6 to 59.6 and the ISM Non-Manufacturing PMI jumped from 60.1 to 64.1.

While sharp increases in service sector activity usually put pressure on the Fed, midweek nonfarm jobs were disappointing.

According to ADP, the number of jobs outside agriculture increased by 330 thousand in July, which is significantly less than the projected jump of 715 thousand people. For the Fed to start a more meaningful debate on policy change, significant improvements in labor market conditions are needed.

Friday’s NFP numbers painted a very different picture from midweek ADP numbers …

Freddie McRates

Average weekly rates on new mortgage loans by 5th August were quoted Freddie Mac to be:

  • 30-year fixed rates fell 3 basis points to 2.77% over the week. This time last year the rates were 2.88%. The average commission fell from 0.7 points to 0.6 points.
  • The 15-year fixed was flat at 2.10% for the week. Rates were down 34 basis points from 2.45% a year ago. The average commission fell from 0.7 points to 0.6 points.
  • Five-year fixed rates fell 5 basis points to 2.40%. Rates fell 50 points from 2.90% a year ago. The average commission increased from 0.3 to 0.4 points.

According to Freddie Mac,

  • Treasury yields have declined as a result of global uncertainty about the continued proliferation of the Delta option.
  • The 30-year fixed rates fell to the level of the beginning of the current year, and the 15-year fixed rates were fixed at an all-time low.
  • This bodes well for anyone looking to refinance, renovate, or even buy a new home.

Rates of the Mortgage Bankers Association

A week before 30th July rates we:

  • Average interest rates for 30-year fixed loans with corresponding loan balances decreased from 3.01% to 2.97%. Points decreased from 0.34 to 0.33 (including processing fees) for LTV loans of 80%.
  • Average 30-year fixed mortgage rates, backed by the FHA, rose from 3.03% to 3.08%. Points dropped from 0.35 to 0.29 (including creation fee) for loans with LTV 80%.
  • Average 30-year interest rates on large loan balances increased from 3.11% to 3.12%. Points increased from 0.27 to 0.30 (including processing fees) for 80% LTV loans.

Weekly data released by the Mortgage Bankers Association showed that the aggregate market index, which measures the volume of mortgage applications, fell 1.7% in the week ending July. A week earlier, the index rose 5.7%.

The refinancing index was down 2% and was 3% lower than in the same week a year ago. The index rose 9% last week.

In the week ending 30th In July, the share of refinancing mortgage activities increased from 67.5% to 67.6%. The share increased from 64.9% to 67.5% a week earlier.

According to the MBA,

  • Interest rates fell globally last week as markets gauged the latest concerns over the delta option.
  • Rates on 30-year mortgages fell below 3% in an MBA study for the first time since February.
  • The downturn has provided an opportunity for many homeowners who have not yet refinanced to lower their rates and payments.
  • The volume of refinancing applications declined slightly after rising 11% from the previous week.
  • Purchase orders fell again, reflecting a persistent stock shortage that continues to drive up housing prices.

A week ahead

The first half of the week is quieter. Economic data includes vacancy and inflation data at JOLT.

Expect inflation to have the biggest impact on yields. We also expect the previous week’s nonfarm payrolls to provide returns, while maintaining direction at the start of the week.

Outside the economic calendar, however, COVID-19 news updates will remain a key factor.


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