US Mortgage Rates Fall Ahead Of Fed Policy Decision Next Week



Mortgage rates fell by 2 years.nd every 4 weeks in the week ending 10th June.

Reverse growth of 4 basis points from the previous week, 30-year fixed rates fell 3 basis points to 2.96%.

The slight cut in mortgage rates left 30-year fixed rates below 3% at 3%.rd week in a row.

Compared to last year, 30-year fixed rates are down 25 basis points.

30-year fixed rates are still down 198 basis points from the last peak in November 2018 of 4.94%.

Economic data for the week

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

Economic data in 1st half of the week included vacancy and trade data for April.

The statistics have been biased in the positive direction, maintaining unwavering optimism about the economic recovery.

Particularly disappointing nonfarm payrolls data a week earlier and uncertainty over inflation and labor market data later in the week weighed on Treasury yields and ultimately mortgage rates.

Freddie Mac Rates

Average weekly rates on new mortgage loans by 10th June quotes Freddie Mac be:

  • 30-year fixed rates fell 3 basis points to 2.96% over the week. This time last year the rates were 3.21%. The average commission increased from 0.6 to 0.7 points.
  • 15-year fixed prices fell 4 basis points 2.23% over the week. Rates were down 39 basis points from 2.62% a year ago. The average commission remained unchanged and amounted to 0.6 points.
  • Five-year fixed rates fell 9 basis points to 2.55%. Rates fell 55 points from 3.10% a year ago. The average commission remained unchanged and amounted to 0.2 points.

According to Freddie Mac,

  • The economy is recovering at a surprisingly fast pace. As the restrictions on the pandemic continue to be lifted, economic growth will continue in the coming months.
  • Despite a stronger economy, the housing market is seeing a slowdown in bidding activity due to moderately higher mortgage rates.
  • However, this has not yet led to a deterioration in the trajectory of house prices, because stock shortages continue to keep prices high.

Rates of the Mortgage Bankers Association

A week before 4th June tariffs we:

  • Average interest rates on 30-year fixed balances fell from 3.17% to 3.15%. Points decreased from 0.39 to 0.34 (including processing fees) for LTV 80% loans.
  • Average 30-year fixed mortgage rates supported by the FHA fell from 3.16% to 3.12%. Points increased from 0.31 to 0.34 (including processing fees) for 80% LTV loans.
  • Average 30-year interest rates on large loan balances decreased from 3.34% to 3.29%. Points decreased from 0.38 to 0.32 (including processing fees) for LTV loans of 80%.

Weekly data released by the Mortgage Bankers’ Association showed that the aggregate market index, which measures the volume of applications for mortgages, fell another 3.1% in the week ended June. A week earlier, the index fell 4.0%.

The refinancing index fell another 5% from the previous week and was 27% lower than the same week a year ago. The index was down 5% from the previous week.

In the week ending 4th In June, the share of refinancing mortgage activities fell from 61.3% to 60.4%. The share decreased from 61.4% to 61.3% in the previous week.

According to the MBA,

  • Most of the decline in mortgage rates occurred in the past week, with the fixed 30-year mortgage rate falling to 3.15%. This probably influenced the refinancing applications.
  • As fewer homeowners could take advantage of the lower rates, the refinancing rate fell to its lowest level since April.
  • The average loan for a purchase application fell to $ 407,000, below the record high of $ 418,000 set in February.
  • The growth in house prices continues to accelerate, which is due to a favorable demographic situation, the recovery of the labor market and the economy, as well as the fact that the demand for housing is much higher than the supply.

A week ahead

Wholesale inflation and retail sales figures will grab attention and influence mortgage rates.

However, the main event of the week will be the decision and forecasts of the FOMC on monetary policy.

Expect them to be the key to US Treasury yields and mortgage rates in the coming week.

From other sources, economic data from China will also be a factor.


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