US Mortgage Rates Hold As Economic Uncertainty Persists


Mortgage rates have remained relatively stable, with 30-year fixed rates only increasing by 1 basis point. After holding steady the week before, rates only increased for the 4e time in 11 weeks.

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

30-year mortgage rates have only risen past the 3% mark once since 21st April.

Compared to the same period last year, 30-year fixed rates increased by 2 basis points.

Fixed 30-year rates were still down 206 basis points since the last peak in November 2018 at 4.94%.

Economic data of the week

The first half of the week was quieter, with US markets closed for Labor Day on Monday.

Key statistics included JOLT’s job postings in the United States, which were bullish after the disappointing NFP figures from the previous week.

With lighter US statistics, the lower than expected non-farm payroll from the previous Friday, however, set rates in the week.

Freddie Mac Pricing

Average weekly rates for new mortgages as of September 9 were cited by Freddie mac to be:

  • 30-year fixed rates rose 1 basis point to 2.88% on the week. Around the same time last year, rates stood at 2.86%. The average fee remained increased from 0.6 to 0.7 points.
  • The 15-year rate rose 1 basis point to 2.19% on the week. Rates were down 18 basis points from 2.47% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates fell 1 basis point to 2.42%. Rates were down 69 points from 3.11% a year ago. The average fee remained unchanged at 0.3 point.

According to Freddie Mac,

  • As the economy continues to grow, it has lost momentum over the past 2 months due to the current wave of the Delta variant.
  • The drop in employment, lower spending and lower consumer confidence resulted, pegging rates.
  • Rates have remained stable despite rising inflation caused by supply and demand imbalances.
  • The net result for housing is that these low and stable rates allow more time for customers to find the homes they are looking to buy.

Mortgage Bankers Association rate

For the week ending 3rd September, the rates were:

  • The 30-year average interest rates set with compliant loan balances remained unchanged at 3.03%. Points increased from 0.34 to 0.33 (including origination fees) for LTV loans at 80%.
  • The 30-year average fixed mortgage rates backed by the FHA fell from 3.09% to 3.07%. Points increased from 0.25 to 0.30 (including origination fees) for LTV loans at 80%.
  • The 30-year average rates for jumbo loan balances fell from 3.13% to 3.14%. Points increased from 0.26 to 0.30 (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 mortgage application volume, fell 1.9% in the week ending 3rd September. The previous week, the index had fallen by 2.4%.

The refinancing index fell 3% and was 4% lower than the same week a year ago. The index had fallen 4% the week before.

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

According to the MBA,

  • Mortgage application volumes fell last week to their lowest level since mid-July, as mortgage rates remained above 3% for several weeks.
  • Refinancing volume has moderated, while purchase volume continues to be below expectations given the lack of housing on the market.
  • Economic data saw mixed signals, with slower job growth but a further drop in the unemployment rate in August.
  • We anticipate that further improvements will lead to a decrease in purchases of MBS FED by the end of the year. This should put upward pressure on mortgage rates.

For the coming week

It’s a busier week ahead on the economic data front. US inflation figures on Tuesday and industrial production figures on Wednesday will influence.

A further acceleration in inflationary pressures would probably push the Fed’s tapering deadlines forward. As job growth has slowed, a continued pick-up in inflationary pressures is expected to be curbed. So expect further inflationary pressures to push mortgage rates north.

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