Mortgage rates held relatively steady after a spike in early February.
In the week ending 24th February, 30-year fixed rates slipped by three basis points to 3.89%. 30-year fixed rates had jumped by 23 basis points in the week prior. 30-year fixed rates held above the 3% mark for a 15th consecutive week.
Compared to this time last year, 30-year fixed rates were up by 92 basis points.
30-year fixed rates were still down by 105 basis points, however, since November 2018’s last peak of 4.94%.
Economic Data from the Week
U.S economic data was on the light side in the first half of the week. Private sector PMI and consumer confidence figures for February were in focus. The numbers were positive, with a sharp pickup in service sector activity positive for U.S Treasury yields.
In February, the services PMI jumped from 51.2 to 56.7, driving the composite PMI from 51.1 to 56.0. While private-sector PMIs were positive, consumer confidence weakened. In February, the CB Consumer Confidence Index slipped from 111.1 to 110.5.
While the stats were upbeat, geopolitics weighed on demand for riskier assets in the week.
Freddie Mac Rates
The weekly average rates for new mortgages as of 24th February were quoted by Freddie Mac to be:
30-year fixed rates slipped by 3 basis points to 3.89% in the week. This time last year, rates stood at 2.87%. The average fee remained unchanged at 0.8 points.
15-year fixed rates fell by 1 basis point to 3.14% in the week. Rates were up by 80 basis points from 2.34% a year ago. The average fee fell from 0.8 points to 0.7 points.
5-year fixed rates held steady at 2.98%. Rates were down by 1 basis point from 2.99% a year ago. The average fee remained unchanged at 0.3 points.
According to Freddie Mac,
Despite the decline in mortgage rates, rates have increased by more than a full percent in six months.
Economic growth remains strong while rising inflation impacts consumer sentiment, which has taken a hit at the turn of the year.
Higher mortgage rates and low inventories will likely support a further upward trend in house prices before easing back later in the year.
Mortgage Bankers’ Association Rates
For the week ending 18th February, the rates were:
Average interest rates for 30-year fixed with conforming loan balances rose from 4.05% to 4.06%. Points increased from 0.45 to 0.48 (incl. origination fee) for 80% LTV loans.
Average 30-year fixed mortgage rates backed by FHA increased from 4.01% to 4.09%. Points fell from 0.59 to 0.56 (incl. origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances increased from 3.81% to 3.84%. Points rose from 0.39 to 0.45 (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, tumbled by 13.1% in the week ending 18th February. The Index had fallen by 5.4% in the previous week.
The Refinance Index slid by 16% and was 56% lower than the same week one year ago. In the week prior, the Index had fallen 9%.
The refinance share of mortgage activity decreased from 52.8 to 50.1%. In the previous week, the share had declined from 56.2% to 52.8%.
According to the MBA,
Mortgage applications fell to their lowest level since December 2019, weighed by the upward trend in mortgage rates.
Higher mortgage rates have hit refinances, with refinance activity down in six of the first seven weeks of the year.
While the average loan size did not increase in the week, it hovered around last week’s survey record high of $453,000.
For the week ahead
From the U.S, ISM Manufacturing and ADP nonfarm employment change figures will be key early in the week. While the stats will draw attention, geopolitics will be the key driver. Last Thursday, Russia invaded Ukraine, driving demand for the safe-havens. Progress towards an end to the invasion would support a further pickup in mortgage rates.
This article was originally posted on FX Empire