Mortgage rates were on the rise, supported by market risk sentiment early in the week. Geopolitics and the COVID-19 stimulus package will be of influence this week.
Mortgage rates were on the rise for the 1st time in 3 weeks, after having hit a new record low in the week prior.
30-year fixed rates increased by 8 basis points to 2.96% in the week ending 13th August.
In the week prior, 30-year fixed rates had fallen by 11 basis points to a new all-time low 2.88%.
Compared to this time last year, 30-year fixed rates were down by 64 basis points.
30-year fixed rates were also down by 198 basis points since November 2018’s most recent peak of 4.94%.
Economic data was on the lighter side through the 1st half of the week.
Key stats included July’s producer price index and consumer price index figures.
The numbers reflected a pickup in inflationary pressures at the start of the 3rd quarter, with the annual rate of core inflation picking up from 1.2% to 1.6%.
In July, the producer price index increased by 0.6%, reversing a 0.2% decline from June.
Better than expected numbers came off the back of the better than expected jobless claims and nonfarm payroll figures from the week prior.
While the stats were skewed to the positive, there was still no progress on the COVID-19 stimulus package, however. The lack of progress pinned back U.S Treasury yields in the week.
The weekly average rates for new mortgages as of 13th August were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 7th August, rates were quoted to be:
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, which is a measure of mortgage loan application volume, increased 6.8% in the week ending 7th August. In the week prior, the index had decreased by 5.1%.
The Refinance Index increased by 9% and was 47% higher than the same week a year ago. In the week prior, the index had fallen by 7%.
The refinance share of mortgage activity increased from 63.9% to 65.7% in the week ending 7th August. In the week prior, the share had decreased from 65.1% to 63.9%.
According to the MBA,
It’s a relatively quiet 1st half of the week on the U.S economic calendar.
Key stats include NY Empire State Manufacturing figures for August and July Building permit and housing start figures.
While we can expect some influence from the numbers, the focus will remain on the COVID-19 stimulus package.
Updates from the U.S – China trade talks will also have an impact on U.S Treasury yields.
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.