FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
43,346,888Confirmed
1,159,097Deaths
31,905,975Recovered
Fetching Location Data…
Advertisement
Advertisement
Bob Mason
Home loan / reverse mortgage or transforming assets into cash concept : House model, US dollar notes on a simple balance scale, depicts a homeowner or a borrower turns properties / residence into cash

Mortgage rates were in decline in the week ending 1st October. Following a 3 basis point rise in the week prior, the 30-year fixed rate fell by 2 basis points to 2.88%.

Compared to this time last year, 30-year fixed rates were down by 77 basis points.

Advertisement

30-year fixed rates were also down by 206 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

Economic data was on the heavier side in the 1st half of the week.

Key stats included September’s consumer confidence and ADP non-farm employment change figures. Finalized 4th quarter GDP numbers and Chicago’s PMI for September were also in focus ahead of a busy end to the week.

The CB Consumer Confidence Index jumped from 86.3 to 101.8 in September, with the ADP reporting a 749k rise in nonfarm.

Also positive was an upward revision to 2nd quarter GDP figures. In the 2nd quarter, the U.S economy contracted by 31.4%, revised up from a prelim 31.7%.

From the private sector, the Chicago PMI rose from 51.2 to 62.4, with housing sector data also impressing.

Pending home sales jumped by 8.8% in August, following a 5.9% rise in July.

From China, private sector PMIs also supported riskier assets and the optimistic outlook on the Chinese economy.

Away from the economic calendar, however, the 1st Presidential Debate weighed on riskier assets on Wednesday.

While the debate was market negative, progress on Capitol Hill towards a COVID-19 relief Bill was market risk positive.

Advertisement

Freddie Mac Rates

The weekly average rates for new mortgages as of 1st October were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 2 basis points to 2.88% in the week. Rates were down from 3.65% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates fell by 4 basis points to 2.36% in the week. Rates were down from 3.14% compared with a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates held steady at 2.90% in the week. Rates were down by 48 points from last year’s 3.38%. The average fee also remained unchanged at 0.2 points.

According to Freddie Mac,

  • The housing market has seen a strong, upward trajectory amid a very uncertain time. Mortgage rates sitting at sub-3% levels since July have supported the sector.
  • Potential buyers are seeing increased purchasing power, with existing homeowners able to refi at better rates.
  • Several factors could disrupt this activity, including higher home prices, lower inventories, and lender capacity.

Mortgage Bankers’ Association Rates

For the week ending 25th September, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.23% to 3.15%. Points increased from 0.37 to 0.43 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.10% to 3.05%. Points rose from 0.46 to 0.52 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.35% to 3.33%. Points decreased from 0.42 to 0.39 (incl. origination fee) for 80% LTV loans.

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 4.8% in the week ending 25th September. In the week prior, the Index had increased by 6.8%.

The Refinance Index slid by 7% from the week prior and was 52% higher than the same week a year ago. In the previous week, the Index had risen by 9%.

The refinance share of mortgage activity fell from 64.3% to 63.3%. In the week prior, the share had increased from 62.8% to 64.3%.

According to the MBA,

  • The 30-year fixed-rate mortgage fell by 5 basis points to 3.05% – the lowest in MBA’s survey.
  • In spite of declining rates, refinances fell by more than 6%, attributed to a 9% fall in conventional refinance applications.
  • There are indications that refinance rates are not decreasing to the same extent as rates for home purchase loans.
  • Many lenders are still operating at full capacity and working through operational challenges. This is limiting the number of applications that they are able to process.

For the week ahead

It’s a relatively busy 1st half of the week on the U.S economic calendar.

Key stats include September ISM Non-Manufacturing PMI figures and August’s JOLT’s job openings.

On Wednesday, the FOMC meeting minutes will also be in focus.

From the week prior, however, disappointing labor market numbers and U.S President Trump’s positive COVID-19 test will influence.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US