Mortgage rates fall again to mark a 3rd consecutive week at sub-3% levels, supporting refinancing.
Mortgage rates fell for a 4th week in 5-weeks in the week ending 6th May. Reversing a 1 basis point rise from the week prior, 30-year fixed rates fell by 2 basis points to 2.96%.
Compared to this time last year, 30-year fixed rates were down by 30 basis points.
30-year fixed rates were still down by 198 basis points since November 2018’s last peak of 4.94%.
Notably, mortgage rates remained below prior the 3% mark for a 3rd consecutive week.
It was busy first half of the week on the U.S economic calendar.
Key stats included private sector PMI numbers for April, factory orders and trade data, and ADP nonfarm employment change figures.
The stats were skewed to the negative, with the market’s favored ISM Non-Manufacturing PMI falling from 63.7 to 62.7.
Manufacturing sector growth also softened in April, with the ISM Manufacturing PMI falling from 64.7 to 60.7
In March, the U.S trade deficit widened from $70.5bn to $74.4bn, while factory orders rose by a weaker than expected 1.1%.
Also falling short of forecasts was a 742k increase in nonfarm employment according to the ADP. Economists had forecast an 800k rise.
The weaker stats coupled with the FED’s assurances of low for longer pegged back Treasury yields and mortgage rates.
The weekly average rates for new mortgages as of 6th May were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 30th April, the rates were:
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, declined by 0.9% in the week ending 30th April. In the week prior, the index had fallen by 2.5%.
The Refinance Index rose by 0.1% and was 17% lower than the same week a year earlier. The Index had fallen by 1.0% in the week prior.
In the week ending 30th April, the refinance share of mortgage activity increased from 60.6% to 61.0%. The share had risen from 60.0% to 60.6% in the previous week.
According to the MBA,
It’s a quieter first half of the week on the U.S economic calendar. JOLTs job openings and inflation figures are in focus.
Following last week’s disappointing nonfarm payroll figures, however, the markets may be desensitized to any pickup in inflationary pressures.
That should leave mortgage rates at sub-3% levels for a 4th consecutive week.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.