Mortgage Rates

U.S Mortgage Charges Maintain Regular as Financial Uncertainty Lingers


Mortgage rates remained relatively constant, with the 30-year fixed rate only increasing 1 basis point. After holding steady the week before, rates rose for the fourth time in 11 weeks.

In the week ending September 9, 30-year fixed interest rates rose 1 basis point to 2.88%.

The 30-year mortgage rate has risen above the 3% mark only once since April 21.

Compared to this point in the previous year, the 30-year fixed interest rate rose by 2 basis points.

The 30-year fixed rate is still 206 basis points lower than the last high of 4.94% in November 2018.

Economic data of the week

It was a quieter first half of the week as US markets closed for Labor Day on Monday.

Key stats included JOLT job vacancies from the US, which were bullish after disappointing NFP numbers the week before.

However, with the US stats on the lighter side, the weaker-than-expected non-farm payrolls from the previous week’s Friday were pegged to interest rates.

Freddie Mac Awards

The average weekly rate on new mortgages as of September 9th was from Freddie Mac to be:

According to Freddie Mac,

  • While the economy continues to grow, it has lost momentum in the past 2 months due to the current wave of the Delta variant.

  • The result was weaker employment, lower spending and falling consumer confidence, all of which pushed interest rates lower.

  • Despite rising inflation, interest rates have remained stable due to supply and demand imbalances.

  • The net result for housing is that these low and stable prices give customers more time to find the homes they are looking for.

Advice from the Mortgage Bankers Association

The story goes on

For the week ending September 3rd, Prices became:

  • The average interest rates for 30-year fixed bonds with corresponding loan balances remained unchanged at 3.03%. The points fell from 0.34 to 0.33 (including issuing fee) for 80% LTV loans.

  • The average 30-year fixed-rate mortgage rate backed by FHAs fell from 3.09% to 3.07%. The points rose from 0.25 to 0.30 (including the issuing fee) for 80% LTV loans.

  • The 30-year average jumbo credit balance increased from 3.13% to 3.14%. The points rose from 0.26 to 0.30 (including issuing fee) for 80% LTV loans.

The weekly numbers released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan size, declined 1.9% for the week ended September 3. The previous week the index had fallen by 2.4%.

The refinancing index fell by 3% and was 4% lower than in the same week a year ago. The index was down 4% in the previous week.

In the week ending September 3, the refinancing share of the mortgage business remained unchanged at 66.8%. In the previous week, the share had fallen from 67.3% to 66.8%.

According to the MBA,

  • The volume of mortgage applications fell last week to its lowest level since mid-July as mortgage rates stayed above 3% for several weeks.

  • The refinancing volume has weakened, while the purchase volume remains below expectations due to the lack of apartments on the market.

  • Economic data has shown mixed signals, with slower employment growth but a further decline in the unemployment rate in August.

  • We expect further improvements to slow down FED MBS purchases by the end of the year. This should push mortgage rates up a little.

For the coming week

A busier week is ahead on the economic data front. US inflation numbers on Tuesday and industrial production numbers on Wednesday will have an impact.

A further rise in inflationary pressures would likely favor the Fed’s schedules for tapering. While employment growth has slowed, a sustained rise in inflationary pressures should be contained. So expect further inflationary pressures to drive mortgage rates north.

This article was originally published on FX Empire

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