Hazy Economic Outlook Leaves Mortgage Rates Adrift

Mortgage rates have held steady after a week when the spread of new COVID-19 variants and debate over federal pandemic relief efforts clouded the near-term economic picture. So reports Moneywise.

According to Freddie Mac, the average for a 30-year fixed rate mortgage was unchanged for the week ending February 4 at 2.73%. The average for a 15-year fixed rate loan edged higher by one basis point to 2.21%.

Zillow economist Matthew Speakman noted that “economic data and pandemic-related developments paint a conflicting picture of the economy’s path forward.”

Read the full article from Moneywise. 

Source: themortgageleader.com

Rising mortgage rates push applications lower

For the second week in a row, mortgage applications decreased – this time, down 4.1% for the week ending Jan. 22, according to data from the Mortgage Bankers Association. The 30-year-fixed rate rose to 2.95%, its highest level since November 2020, according to Joel Kan, MBA associate vice president of economic and industry forecasting.

All other mortgage rates in the survey posted a decline.

“In a sign that borrowers are increasingly more sensitive to higher rates, large declines in government purchase applications and refinance applications pulled overall activity lower,” Kan said. “Purchase applications also decreased last week, but the impressive trend of year-over-year growth since the second half of 2020 has continued in early 2021.”

The seasonally adjusted purchase index decreased 4% from one week earlier, while the unadjusted purchase index increased 3 % compared with the previous week.

The refinance index has now declined two straight weeks, but is still 83% higher than last year.


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Kan noted that the unadjusted purchase index was still 16% higher than the same week one year ago.

“Since hitting a recent low in April 2020, the average purchase loan amount has steadily risen – in line with the accelerating home-price appreciation occurring in most of the country because of strong demand and extremely low inventory levels,” he said.

The FHA share of total mortgage applications increased to 9.4% from 9.3% the week prior. The VA share of total mortgage applications decreased to 12.4% from 13.8% the week prior.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.95% from 2.92%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) decreased to 3.17% from 3.19%
  • The average contract interest rate for 30-year fixed-rate mortgages decreased to 2.88% from 3.01%
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.43% from 2.48%
  • The average contract interest rate for 5/1 ARMs decreased to 2.60% from 2.76%

Source: housingwire.com

Current Mortgage Rates Continue to Move Lower

It’s been good news this week for home buyers and home owners looking to refinance as mortgage rates have improved. It hasn’t been a big swing lower but mortgage rates have mostly remained lower after a drop on Monday morning. Read on for more details.

Where are mortgage rates going?                                             

Mortgage rates move lower in the Freddie Mac PMMS

Current mortgage rates have moved lower for second straight week, according to the Freddie Mac Primary Mortgage Market Survey (PMMS).

Here are the numbers:

  • The average rate on a 30-year fixed rate mortgage moved lower by two basis points to 4.51% (0.5 points)
  • The average rate on a 15-year fixed rate mortgage ticked lower by three basis points to 3.98% (0.5 points)
  • The average rate on a 5-year adjustable rate mortgage fell by five basis points to 3.82% (0.03 points)

Here is what Freddie Mac’s Economic & Housing Research Group had to say about rates this week:

“Mortgage rates inched backward this week to their lowest level since mid-April.

Backed by very strong consumer spending, the economy is red-hot this month, which is in turn rippling through the financial markets and driving equities higher.

Unfortunately, the same cannot be said about the housing market, where it appears sales activity crested in late 2017. Existing-home sales have now stepped back annually for the fifth straight month, and purchase mortgage applications this week were barely above year ago levels.

It is clear affordability constraints have cooled the housing market, especially in expensive coastal markets. Many metro areas desperately need more new and existing affordable inventory to break out of this slump.”

Rate/Float Recommendation                                  

Lock now before move even higher     

While mortgage rates have improved for the second consecutive week, the long-term outlook continues to be for them to gradually increase as the Federal Reserve gets ready for and follows through with increases to the nation’s benchmark interest rate. The first hike is expected to take place next month, with another likely in December.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:           

Jobless Claims

Applications filed for U.S. unemployment benefits for the week of 8/18 came in at 210,000. That’s 2,000 lower than the previous reading, bringing the 4-week moving average down to 213,750.

FHFA House Price Index

The FHFA House Price Index increased 0.2% from the previous month in June. That brings the year over year increase to 6.5%.

PMI Composite Flash

The PMI Composite index hit a 55.0 in August. Manufacturing came in at 54.5 while Services hit 55.2.

New Home Sales

New Home Sales for July came in at an annualized rate of 627,000. That’s slightly below the consensus reading of 649,000.

Jackson Hole Symposium

Kicks off today and ends tomorrow.

Kansas City Fed Mfg Index 

11:00am

Notable events this week:     

Monday:   

Tuesday:   

Wednesday:         

  • Existing Home Sales
  • EIA Petroleum Status Report
  • FOMC Minutes

Thursday:     

  • Jobless Claims
  • FHFA House Price Index
  • PMI Composite Flash
  • New Home Sales
  • Jackson Hole Symposium
  • Kansas City Fed Mfg Index

Friday:          

  • Fedspeak
  • Jackson Hole Symposium

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

New-year optimism reflected in mortgage applications jump

Mortgage applications jumped 16.7% after a 4.2% drop last week, according to the Mortgage Bankers Association.

The jump underlines the seasonality behind last week’s decrease in mortgage rates, as well as the expectation of additional fiscal stimulus from the incoming administration, per MBA Associate Vice President of Economic and Industry Forecasting Joel Kan.

“Booming refinance activity in the first full week of 2021 caused mortgage applications to surge to their highest level since March 2020, despite most mortgage rates in the survey rising last week,” Kan said.

The 30-year fixed mortgage rate climbed two basis points to 2.88%, but the 15-year fixed rate fell to 2.39% — a survey low. The refinance index increased 20% from the previous week and was 93% higher than the same week one year ago.

“Even with the rise in mortgage rates, refinancing did not slow to begin the year, with the index hitting its highest level since last March,” said Kan. “Both conventional and government refinance applications increased, with applications for government loans having their strongest week since June 2012.”

The seasonally adjusted purchase index increased 8% after a 0.8% decrease last week.

The FHA share of total applications decreased to 9.6% from 10.1% the week prior. The VA share of total applications increased to 15.8% from 13.6% the week prior.

“This is a positive sign of more lower-income and first-time buyers returning to the market,” Kan said.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.88% from 2.86%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.17% from 3.08%
  • The average contract interest rate for 30-year fixed-rate mortgages increased to 2.93% from 2.90%
  • The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.39% from 2.40%
  • The average contract interest rate for 5/1 ARMs increased to 2.66% from 2.63%

Source: housingwire.com

Mortgage Rates Continue to Rise

Mortgage rates are continuing to move higher this week. We’ve now seen them rise for two consecutive weeks in the Freddie Mac PMMS. The consensus is for them to continue rising for the foreseeable future. Read on for more details.

Where are mortgage rates going?                                             

Mortgage rates rise in the Freddie Mac PMMS again

Mortgage rates have moved higher for the second straight week according to the Freddie Mac Primary Mortgage Market Survey (PMMS). Here are the numbers:

  • The average rate on the 30-year fixed rate mortgage moved two basis points higher to 4.54% (0.5 points)
  • The average rate on a 15-year fixed rate mortgage ticked up two basis points to 3.99% (0.4 points)
  • The average rate on a 5-year adjustable rate mortgage moved up eight basis points to 3.93% (0.3 points)

Here is what Freddie Mac’s Economic and Housing Research Group had to say about mortgage rates this week:

“The 30-year fixed-rate mortgage inched higher for the second straight week.

Borrowing costs may be slowly on the rise again in coming weeks, as investors remain optimistic about the underlying strength of the economy. It’s important to note that mortgage rates are now up three-quarters of a percentage point from last year and home prices – albeit at a slower pace – are still outrunning rising inflation and incomes.

This weakening in affordability is hindering many interested buyers this fall, even as the robust economy brings them into the market. The good news is that purchase mortgage applications have recently rebounded to above year ago levels.”

Rate/Float Recommendation                                    

Lock now before rates move even higher         

Mortgage rates have risen these past few weeks and that trend is expected to continue over the coming months as the Federal Reserve gets ready to, and does, increase the nation’s benchmark interest rate.

If you are planning to buy a home or refinance your current mortgage, we strongly recommend that you lock in a rate sooner rather than later. The longer you wait, the more likely it is that you’ll get a higher rate.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:             

ADP Employment Report

The ADP employment report showed 163,000 jobs added to the U.S. economy in August.

Jobless Claims

Applications filed for unemployment benefits in the U.S. came in at 203,000 for the week of 9/1/18. That’s 10,000 fewer than the previous week, bringing the four-week moving average to 209,500.

Productivity and Costs

Nonfarm productivity rose 2.9% Q/Q in the second quarter of 2018. Unit labor costs fell 0.1%.

PMI Services Index

The PMI Services Index came in at 54.8 for August.

Fedspeak

San Francisco Fed President John Williams is set to speak at 10:00am.

Factory Orders

Factory orders fell 0.8% month over month in July.

ISM Non-Mfg Index

The ISM Non-Mfg index hit a 58.5 in August, up a little from July.

EIA Petroleum Status Report

For the week of 8/31:

  • Crude oil: -4.3 M barrels
  • Gasoline: 1.8 M barrels
  • Distillates: 3.1 M barrels

Notable events this week:     

Monday:   

  • Markets Closed

Tuesday:   

  • PMI Manufacturing Index
  • ISM Mfg Index
  • Construction Spending

Wednesday:         

Thursday:     

  • ADP Employment Report
  • Jobless Claims
  • Productivity and Costs
  • PMI Services Index
  • Fedspeak
  • Factory Orders
  • ISM Non-Mfg Index
  • EIA Petroleum Status Report

Friday:          

  • Employment Situation
  • Fedspeak

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Alongside rising yields, mortgage rates increase to 2.79%

The average mortgage rate for a 30-year fixed loan rose from its previous record low by 14 basis points this week to 2.79%, according to Freddie Mac’s Primary Mortgage Market Survey. This marks the first time mortgage rates have risen in almost two months.

The 15-year fixed rate also rose slightly this week from 2.16% to 2.23%.

Even with this week’s uptick, there have still been 23 consecutive weeks when average mortgage rates have been below 3%.

According to Sam Khater, Freddie Mac’s chief economist, rising treasury yields have been putting pressure on rates to finally move up again.

“While mortgage rates are expected to increase modestly in 2021, they will remain inarguably low, supporting homebuyer demand and leading to continued refinance activity,” Khater said. “Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result.”

And take advantage they have.


Leveraging eClosings to effectively manage increased loan volumes

With no end in sight to record low mortgage rates and the increased loan volume, lenders must streamline workflows and accelerate time to close. Evolving from traditional closings to hybrid closings to full eClosings can help lenders process more loans at a faster pace without overwhelming their resources.

Presented by: SimpleNexus

Mortgage applications jumped 16.7% last week according to the Mortgage Bankers Association, and refi’s hit a massive 93% year-over-year mark as government loans experienced their strongest week in nearly eight years.

The jump underlines the seasonality behind the decrease in mortgage rates the week prior, coupled with expectations of additional fiscal stimulus from the incoming administration, according to MBA Associate Vice President of Economic and Industry Forecasting Joel Kan.

While purchase borrowers have been scrambling for months now to battle it out for the lowest possible rate on the limited inventory available, the Federal Reserve may have given borrowers until the end of 2021 to snap one up.

In a speech on Friday, Fed. Vice Chairman Richard Clarida said he expects the central bank to maintain the pace of its bond purchases through 2021. Those purchases are what prevented a credit crunch and made borrowing cheaper back in March.

Now, at an average of $120 billion a month — split between $80 billion in Treasuries and $40 billion in MBS — Fed holdings have surpassed $7 trillion, and Clarida doesn’t see a pullback anytime this year.

Source: housingwire.com