Friday, June 9, 2023

US mortgage rates fall for fifth week running on soft inflation

Mortgage rates declined for the fifth week in a row in the week ending December 15. The 30-year fixed mortgage rate declined two basis points to 6.31.

Following the latest decline, the 30-year fixed rate is up 132 basis points from its most recent low of 4.99% on 3 August. 30-year fixed rates were up 319 basis points year-to-date.

economic data from the week

US inflation data piqued interest on Tuesday. The soft inflation number for November backed up Fed Chair Powell’s pre-Fed blackout period speech, talking of slowing the pace of interest rate hikes.

In November, the US annual inflation rate dropped from 7.7% to 7.1%, with consumer prices rising only 0.1% for the month. While markets were expecting sub-7%, the soft numbers were pretty cool on Wednesday in the lead-up to the Fed interest rate decision and economic projections.

Freddie Mac Rates

Quoted weekly average rates for new mortgages as of December 15, 2022 Freddie Mac to happen,

  • The 30-year fixed rate declined two basis points to 6.31%. This time last year this rate was 3.12%.
  • The 15-year fixed rates fell 13 basis points to 5.54%. Rates were up 320 basis points from 2.34% a year ago.

According to Freddie Mac,

  • Mortgage rates continued to decline due to soft inflation and little change in the Fed’s monetary policy.
  • The recent declining trend in mortgage rates has stabilized the buying demand.
  • However, despite the reduction in rates, demand remains weak due to affordability issues.

mortgage bankers association rates

For the week ending December 9, 2022, rates Were,

  • The 30-year fixed average interest rate increased from 6.41% to 6.42% with commensurate loan balances. Scores increased from 0.63 to 0.64 (including origination fee) for 80% LTV loans.
  • Average 30-year fixed mortgage rates backed by the FHA rose to 6.40% from 6.39%. Score increased from 0.93 to 1.03 (including origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 6.08% to 6.14%. The score dropped from 0.50 to 0.42 (including origination fee) for 80% LTV loans.

Weekly data released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, rose 3.2% in the week ended Dec. 9. The index declined by 1.9% in the previous week.

The refinancing index increased by 3% and was down 85% compared to the same week a year ago. In the past week, the index gained 5%.

The refinance share of mortgage activity increased from 28.7% to 29.4%. In the last week, the refinance share increased from 26.1% to 28.7%.

According to MBA,

  • Mortgage rates rose modestly after a month-long decline as the market reacted to mixed inflation data and Fed policy intentions.
  • Applications increased, supported by a pickup in purchase and refinancing activity.
  • Nonetheless, rates were still more than three percent higher than a year ago, keeping purchase and refinance applications well below last year’s levels.

for the coming week

This first part of the week is calm. Consumer confidence data for December will be of interest on Wednesday. However, barring a sharp jump in consumer confidence, the numbers are unlikely to raise mortgage rates much.

After last week’s hawkish Fed rate hike, markets will need to deal with the ever-growing threat of a US recession and a dodgy Fed.

With the data on the lighter side, FOMC member chatter will need to be monitored.

Times of National
Times of National
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