U.S. mortgage rates rebound, boosted by bullish U.S. economic data and inflation

Mortgage rates increased for the 1st time in 3 weeks, scoring a 4e increase in 6 weeks

The rise in mortgage rates saw the 30-year fixed rate cross the 3% mark.

In the week ending 18the In November, fixed 30-year rates rose 12 basis points to 3.10%.

Compared to the same period last year, 30-year fixed rates rose 38 basis points.

30-year fixed rates are still down 184 basis points since the last peak in November 2018 at 4.94%.

Economic data of the week

Through the 1st Halfway through the week, retail sales figures impressed, despite a sharp recovery in inflationary pressures.

In October, core retail sales increased 1.7%, with retail sales also increasing 1.7%. Retail sales increased 0.5% in September, with core retail sales increasing 0.70%.

Freddie Mac Pricing

Average weekly rates for new mortgages as of 18e November were cited by Freddie mac to be:

  • Fixed 30-year rates jumped 12 basis points to 3.10% in the week. Around the same time last year, rates were 2.72%. The average fee remained unchanged at 0.7 points.
  • The 15-year fixed rate also jumped 12 basis points to 2.39% on the week. Rates rose 11 basis points from 2.28% a year ago. The average fee remained unchanged at 0.6 points.
  • 5-year fixed rates fell 4 basis points to 2.49%. Rates fell 36 points from 2.85% a year ago. The average fee remained down 0.4 point to 0.3 point.

According to Freddie Mac,

  • The combination of rising inflation and consumer spending pushed up mortgage rates.
  • Homebuyers looking to buy a home are fueling strong demand while ongoing inventory shortages do not improve amid higher home prices.

Mortgage Bankers Association rate

For the week ending 12e November, the rates were:

  • The 30-year average interest rates set with compliant loan balances fell from 3.16% to 3.20%. The points remained increased from 0.34 to 0.43 (including origination fees) for LTV loans at 80%.
  • The 30-year average fixed mortgage rates backed by the FHA fell from 3.18% to 3.23%. Points increased from 0.31 to 0.41 (including origination fees) for LTV loans at 80%.
  • The 30-year average rates for jumbo loan balances remained unchanged at 3.26%. Points increased from 0.32 to 0.39 (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 2.8% in the week ending the 12th.e November. The previous week, the index had risen 5.5%.

The refinancing index fell 5% and was 31% lower than the same week a year ago. The previous week, the index had risen 7%.

The refinancing share of mortgage activity rose from 63.5% to 62.9%. The previous week, the share had risen from 61.9% to 63.5% of total claims.

According to the MBA,

  • Refinancing requests refused for the 7the time in 8 weeks, while mortgage rates rose after 2 weeks of decline.
  • Activity was particularly sensitive to rate movements.
  • Purchase requests increased for the conventional and government loan segments.
  • Household demand continues to show resilience at a time when home buying activity generally slows down.
  • The twosd The direct increase in purchase requests suggests that stronger business activity may continue in the coming weeks.
  • Despite strong demand, purchase requests were 5.7% lower than a year ago.

For the coming week

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

On Tuesday, the preliminary private sector PMIs for November are due for release, with services PMI being the key statistic of the day.

With US markets closed Thursday; a particularly busy economic calendar will also influence Wednesday.

Key stats include 3e Quarterly GDP, personal spending, inflation and basic durable goods orders.

On the monetary policy front, the minutes of the FOMC meeting will also attract a lot of attention.

Outside of the economic calendar, however, news of COVID-19 from Europe will also need to be considered.

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