US mortgage rates exceed 3% for the first time since late June

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Mortgage rates jumped above the 3% level for just the 2sd time since 21st April.

In the week ending 30e In September, 30-year fixed rates jumped 13 basis points to 3.01%.

30-year mortgage rates have only risen past the 3% mark once since 21st April, when rates hit 3.02% on the 23rd June.

Compared to the same period last year, fixed 30-year rates increased by 13 basis points.

Fixed 30-year rates are still down 193 basis points since the last peak in November 2018 at 4.94%.

Economic data of the week

It was a relatively calm start to the week on the US economic data front. Key statistics included durable and basic goods orders and consumer confidence figures.

The statistics were negative, with orders for basic durable goods falling short of expectations and consumer confidence declining.

In August, basic durable goods orders rose only 0.2% against an expected increase of 0.5%. Orders for basic durable goods rose 0.8% in July.

In September, the CB consumer confidence index fell from 115.2 to 109.3. Economists had forecast a more modest drop to 114.5.

In the housing sector, the rise in house prices continued to accelerate. The S & P / CS HSI Composite – 20 nos index was up 19.9% ​​year-on-year in July. In June, the index was up 19.1%.

Despite rising prices, pending home sales jumped 8.1% in August, reversing a 2.0% drop from July.

Freddie Mac Pricing

Average weekly rates for new mortgages as of 30e September were cited by Freddie mac to be:

  • 30-year fixed rates rose 13 basis points to 3.01% on the week. Around the same time last year, rates stood at 2.88%. The average fee remained unchanged at 0.7 points.
  • The 15-year fixed rate also rose 13 basis points by 2.28% on the week. Rates were down 8 basis points from 2.36% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates increased more modestly by 5 basis points to 2.48%. Rates were down 42 points from 2.90% a year ago. The average fee remained unchanged at 0.3 point.

According to Freddie Mac,

  • Mortgage rates rose on all types of loans, with the 10-year US Treasury yield hitting its highest level since June.
  • The jump in the 10-year yield has been attributed to the Fed’s communication on debt reduction, widening inflation and new energy supply shortages which are exacerbating other labor shortages. and materials.
  • Freddie Mac expects rates to continue rising modestly, which will likely impact home prices, causing them to moderate slightly after rising over the past year.

Mortgage Bankers Association rate

For the week ending 24e September, the rates were:

  • The 30-year average interest rates set with compliant loan balances fell from 3.03% to 3.10%. Points increased from 0.30 to 0.34 (including origination fees) for LTV loans at 80%.
  • The 30-year average fixed mortgage rates backed by the FHA fell from 3.07% to 3.09%. Points remained unchanged at 0.25 (including origination fees) for 80% LTV loans.
  • The 30-year average rates for jumbo loan balances fell from 3.11% to 3.14%. Points increased from 0.25 to 0.33 (including origination fees) for LTV loans at 80%.

Weekly figures released by the Mortgage Bankers Association showed that the Composite Market Index, which is a measure of the volume of mortgage applications, fell 1.1% during the week ending the 24th.e September. The previous week, the index had risen 4.9%.

The refinancing index fell 1.0% and was 0.4% higher than the same week a year ago. The index had risen 7% the week before.

In the week ending 24e In September, the refinancing share of mortgage activity rose from 66.2% to 66.4% of total applications. The share had fallen from 64.9% to 66.2% the previous week.

According to the MBA,

  • Heightened optimism about the strength of the economy pushed Treasury yields higher after last week’s FOMC meeting.
  • Mortgage rates have increased for all loan terms.
  • The increase in rates has led to a decrease in purchase and refinancing requests.
  • As home price appreciation continues to escalate, increasing by more than 19% per year in July, requests for larger loans continue to outpace lower-balance loans.
  • The average amount of loan applications reached $ 410,000, its highest level since May 2021.

For the coming week

It’s a relatively busy first half of a week on the US economic calendar.

Factory orders, ISM non-manufacturing PMI and ADP non-farm employment development numbers will influence returns at the start of the week.

Following the inflation and personal spending figures, the optimistic figures will give the FOMC hawks more ammunition to force a move. Such a scenario would push yields north and mortgage rates higher.


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