Mortgage rates were on the rise for a 4th consecutive week in the week ending 11th March. Following a 5-basis points rise from the week prior; 30-year fixed rates rose by a further 3 basis points to 3.05%.
Compared to this time last year, 30-year fixed rates were down by 31 basis points.
30-year fixed rates were also down by 189 basis points since November 2018’s last peak of 4.94%.
Notably, however, it was just the second plus 3% week since July of last year.
Economic Data from the Week
It was a relatively quiet first half of the week on the U.S economic calendar. January inflation figures were in focus early in the week.
The stats were skewed to the negative, with inflationary pressures softening at the start of the year.
The core annual rate of inflation softened from 1.4% to 1.3%, with core consumer prices rising by just 0.1% in the month of January.
From elsewhere, economic data from China impressed going into the week to set the tone.
Exports surged by 60.6%, with imports jumping by 22.2% in February.
Freddie Mac Rates
The weekly average rates for new mortgages as of 11th March were quoted by Freddie Mac to be:
30-year fixed rates increased by 3 basis points to 3.05% in the week. This time last year, rates had stood at 3.36%. The average fee held steady at 0.6 points.
15-year fixed rates rose by 4 basis points 2.38% in the week. Rates were down by 39 basis points from 2.77% a year ago. The average fee fell from 0.7 points to 0.6 points.
5-year fixed rates rose by 4 basis points 2.77%. Rates were down by 24 points from 3.01% a year ago. The average fee held steady at 0.3 points.
According to Freddie Mac,
As the economy improves given labor market optimism, continued vaccination rollout and additional stimulus pending, mortgage rates increased this week.
Even as rates rise modestly, the housing market remains healthy on the cusp of spring homebuying season.
Homebuyer demand is strong and, for homeowners who have not refinanced but are looking to do so, they have not yet lost the opportunity.
Mortgage Bankers’ Association Rates
For the week ending 5th March, the rates were:
Average interest rates for 30-year fixed to conforming loan balances increased from 3.23% to 3.26%. Points decreased from 0.48 to 0.43 (incl. origination fee) for 80% LTV loans.
Average 30-year fixed mortgage rates backed by FHA increased from 3.19% to 3.20%. Points rose from 0.30 to 0.37 (incl. origination fee) for 80% LTV loans.
Average 30-year rates for jumbo loan balances rose from 3.33% to 3.34%. Points increased from 0.41 to 0.50 (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, decreased by 1.3% in the week ending 5th March. In the previous week, the index had risen by 0.5%.
The Refinance Index decreased by 5% and was 43% lower than the same week one year ago. The index had increased by 0.1% in the week prior.
In the week ending 5th March, the refinance share of mortgage activity decreased from 67.5% to 64.5%. In the previous week, the share had fallen from 68.5% to 67.5%.
According to the MBA,
30-year fixed rates climbed to their highest level since last July and were up 40 basis points since the start of 2021.
Signs of faster economic growth, an improving job market, and increased vaccination distribution pushed rates higher.
The run-up in mortgage rates continues to cool demand for refinance applications.
Activity declined last week for the fourth time in 5-weeks.
For the week ahead
It’s a relatively quiet first half of the week on the U.S economic calendar once more. Key stats include February retail sales and industrial production figures.
Expect retail sales figures to be the key driver.
At the end of last week, a jump in U.S Treasury yields will put further upward pressure on mortgage rates going into the week ahead.
This article was originally posted on FX Empire