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Mortgage rates moved back through to 3% levels for just the 3rd time since 21st April.
In the week ending 14th October, 30-year fixed rates increased by 6 basis points to 3.05%.
Compared to this time last year, 30-year fixed rates were up by 24 basis points.
30-year fixed rates were still down by 189 basis points since November 2018’s last peak of 4.94%.
Economic Data from the Week
Early in the week, JOLT’s job openings disappointed following the weaker than expect NFP numbers from the week prior.
Inflationary pressures persisted at the end of the 3rd quarter, however, contributing to the upswing in mortgage rates.
In September, the annual rate of core inflation held steady at 4%, with core consumer prices rising by 0.2% in the month. Consumer prices were also on the up, rising by 0.4% in the month of September.
Freddie Mac Rates
The weekly average rates for new mortgages as of 14th October were quoted by Freddie Mac to be:
30-year fixed rates rose by 6 basis points to 3.05% in the week. This time last year, rates had stood at 2.81%. The average fee remained unchanged at 0.7 points.
15-year fixed decreased by 7 basis points 2.30% in the week. Rates were down by 5 basis points from 2.35% a year ago. The average fee remained unchanged at 0.7 points.
5-year fixed rates rose by 3 basis point to 2.55%. Rates were down by 35 points from 2.90% a year ago. The average fee fell from 0.3 points to 0.2 points.
According to Freddie Mac,
Mortgage rates rose to their highest level since April, as a result of a buildup in inflationary pressure.
Driven by inflationary pressure and tightening monetary policy, Freddie Mac expects rates to continue a modest upswing.
Historically speaking, rates are still low, but many potential buyers are staying on the sidelines due to high home price growth.
Rising mortgage rates combined with growth home prices make affordability more challenging for potential buyers.
Mortgage Bankers’ Association Rates
For the week ending 8th October, the rates were:
Average interest rates for 30-year fixed with conforming loan balances increased from 3.14% to 3.18%. Points increased from 0.35 to 0.37 (incl. origination fee) for 80% LTV loans.
Average 30-year fixed mortgage rates backed by FHA rose from 3.12% to 3.20%. Points remained unchanged at 0.31 (incl. origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances increased from 3.20% to 3.22%. Points increased from 0.27 to 0.29 (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, increased by 0.2% in the week ending 8th October. In the previous week, the Index had fallen by 6.9%.
The Refinance Index fell by 1.0% and was 16% lower than the same week one year ago. The index had tumbled by 10.0% in the week prior.
In the week ending 8th October, the refinance share of mortgage activity fell from 64.5% to 63.9% of total applications. The share had declined from 66.4% to 64.5% of total applications in the previous week.
According to the MBA,
Mortgage rates reached their highest level since June 2021, but application activity changed little this week.
An increase in home purchase applications offset a slight decline in refinances.
Over the past month, the 30-year fixed has risen 15 basis points, resulting in an 11% drop in refinance applications.
The MBA continues to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive.
For the week ahead
It’s a quiet first half of the week on the U.S economic calendar.
Industrial production figures for September will be the only major stat for the markets to consider.
From the housing sector, building permits and housing starts will also draw interest.
Economic data from China will set the mood at the start of the week, however. 3rd quarter GDP numbers and industrial production figures for September will influence market risk sentiment early in the week.
This article was originally posted on FX Empire