US Mortgage Rates Fall Again As COVID-19 Raises More Uncertainty

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Mortgage rates dropped 9th time in 13 weeks and for the fourth consecutive week in the week ending 22nd July

After declining 2 basis points from the previous week, 30-year fixed rates fell 10 basis points to 2.78%.

From 21st April’s 30-year mortgage rates just exceeded the 3% mark once before the current pullback.

Compared to the same period last year, 30-year fixed rates have decreased by 23 basis points.

30-year fixed rates are still down 216 basis points from the last peak in November 2018 of 4.94%.

Economic data for the week

In the US economic calendar, the first half of the week was calm.

US economic data was limited to June housing commissioning and building permits data. The numbers had a muted effect on US Treasury yields, with risk concerns plaguing the markets at the start of the week.

Concerns about the continued proliferation of the Delta option and its impact on the global economic recovery have weighed on yields.

Freddie Mac Rates

Average weekly rates on new mortgages for 22 years.nd July cited Freddie Mac to be:

According to Freddie Mac,

  • Concerns about the Delta option and the overall trajectory of the pandemic are undoubtedly affecting economic growth.

  • As the economy continues to recover, Treasury yields have declined and mortgage rates have followed suit.

  • Unfortunately, many homebuyers cannot take advantage of the low rates due to limited stocks and high prices.

Rates of the Mortgage Bankers Association

A week before 16th July rates we:

  • Average interest rates for 30-year fixed loans with corresponding loan balances increased from 3.09% to 3.11%. Points increased from 0.37 to 0.43 (including processing fees) for LTV loans of 80%.

  • Average 30-year fixed mortgage rates supported by the FHA fell from 3.15% to 3.08%. Points increased from 0.29 to 0.31 (including processing fees) for 80% LTV loans.

  • Average 30-year interest rates on large loan balances fell from 3.16% to 3.13%. Points increased from 0.27 to 0.32 (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 applications for mortgages, fell 4.0% in the week ending January 16.th July. A week earlier, the index rose by 16.0%.

The refinancing index was down 3% and fell 18% in the same week a year ago. The index rose 20% last week.

Week Ending 16th In July, the share of refinancing mortgage activities increased from 64.1% to 64.9%. The share increased from 61.6% to 64.1% in the previous week.

According to the MBA,

  • The yield on 10-year Treasuries fell sharply last week, in part as investors became more worried about the spread of COVID variants and their impact on global economic growth.

  • Seasonally adjusted number of mortgage applications was lower than 4th July holiday week.

  • The number of buy applications fell to almost the lowest level since May 2020.

  • Limited stocks and higher prices are keeping some potential home buyers out of the market.

  • Refinancing activity decreased over the week, although the rate of applications was close to the highest level since the beginning of May.

A week ahead

The first half of the week is busier. Economic data includes data on durable goods and consumer confidence at the beginning of the week.

Expect consumer confidence metrics to be key.

However, the main event of the week will be the FOMC monetary policy decision and a press conference on Wednesday.

Beyond the economic calendar, COVID-19 news updates will also have an impact.

This article was originally listed on FX Empire

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