30-year fixed rates fell by 8 basis points to 2.91%, reversing a 3 basis point rise from the week prior.
Compared to this time last year, 30-year fixed rates were down by 67 basis points.
30-year fixed rates were also down by 203 basis points since November 2018’s most recent peak of 4.94%.
Economic Data from the Week
Key stats included consumer confidence, durable goods orders, and the weekly jobless claims figures.
While durable goods and core durable goods orders jumped in July, consumer confidence made an unexpected fall.
The only positive in the week was the durable goods orders. While the stats did influence, there was plenty of apprehension ahead of FED Chair Powell’s speech from Jackson Hole on Thursday.
A change to the FED’s monetary policy framework hit U.S Treasury yields and the Dollar.
Geopolitics and COVID-19 news updates also delivered some uncertainty. While the U.S and China trade talks delivered positive news, fresh spikes in new COVID-19 cases in the EU were negative.
For now, however, hopes of a COVID-19 vaccine continue to limit the impact of the COVID-19 numbers on market risk sentiment.
Freddie Mac Rates
Freddie Mac to be:” data-reactid=”37″ type=”text”>The weekly average rates for new mortgages as of 27th August were quoted by Freddie Mac to be:
- 30-year fixed rates decreased by 8 basis points to 2.91% in the week. Rates were down from 3.58% from a year ago. The average fee remained unchanged at 0.8 points.
- 15-year fixed rates fell by 8 basis points to 2.46% in the week. Rates were down from 3.06% compared with a year ago. The average fee remained unchanged at 0.7 points.
- 5-year fixed rates remained unchanged at 2.91% in the week. Rates were down by 40 points from last year’s 3.31%. The average fee fell from 0.3 points to 0.2 points.
According to Freddie Mac,
- Mortgage rates remain at record lows as uncertainty lingers.
- Lower rates continue to incentivize potential buyers.
- The home-buying season, which shifted from spring to summer, will likely continue into the fall.
Mortgage Bankers’ Association Rates
rates were quoted to be:” data-reactid=”50″ type=”text”>For the week ending 21st August, rates were quoted to be:
- Average interest rates for 30-year fixed, backed by the FHA, remained unchanged at 3.16%. Points increased from 0.27 to 0.29 (incl. origination fee) for 80% LTV loans.
- Average interest rates for 30-year fixed with conforming loan balances decreased from 3.13% to 3.11%. Points fell rose 0.36 to 0.38 (incl. origination fee) for 80% LTV loans.
- Average 30-year rates for jumbo loan balances remained unchanged at 3.41. Points also remained unchanged at 0.35 (incl. origination fee) for 80% LTV loans.
The Refinance Index slid by 10% from the previous week and was 34% higher than the same week a year ago. In the week prior, the index had fallen by 5%.
According to the MBA,
- Despite the lower rates, conventional refinance applications fell by 11% and government refinance applications by 6%.
- The combined declines left the total refinance index at its lowest level since July.
- While refinances were on the slide, the home purchase market remains a bright spot for the overall economy.
- Purchase applications were essentially unchanged but were 33% higher than a year ago. This marked the 14th straight week of year-on-year gains.
- Mortgage rates at record lows and households looking for more space are driving this summer’s surge in demand.
For the week ahead
Key stats include August’s ISM private sector PMIs, ADP nonfarm employment change, and the weekly jobless claims figures.
Expect plenty of influence from the stats. The markets will be looking for a combination of improved private sector conditions and a slide in jobless claims.
On the geopolitical risk front, any chatter from Beijing and the Oval Office will also have an impact on yields.
article was originally posted on FX Empire” data-reactid=”70″ type=”text”>This article was originally posted on FX Empire
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