FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
96,051,820Confirmed
2,050,554Deaths
68,718,123Recovered
Fetching Location Data…
Advertisement
Advertisement
Bob Mason
For sale sign in front of large USA home

Mortgage rates fell to a 14th record low of the year, after having held steady in the previous week. In the week ending 3rd December, 30-year fixed rates slipped by 1 basis point to 2.71%.

From this time last year, 30-year fixed rates were down by 97 basis points.

30-year fixed rates were also down by 223 basis points since November 2018’s most recent peak of 4.94%.

Economic Data from the Week

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

The market’s preferred ISM Manufacturing and ADP nonfarm employment change figures for November were in focus.

The stats were negative, with the ISM Manufacturing PMI falling from 59.3 to 57.5. Labor market indicators also continued to flash red, with the ADP reporting just 307k nonfarm payroll jobs added in November. Economists had forecast a 410k rise in nonfarm payrolls.

Away from the economic calendar, progress towards a COVID-19 vaccine failed to support mortgage rates in the week. The FED’s outlook on close to zero interest rates weighed on mortgage rates, as mortgage and refinance applications continued to defy gravity.

Advertisement

Freddie Mac Rates

The weekly average rates for new mortgages as of 3rd December were quoted by Freddie Mac to be:

  • 30-year fixed rates slipped by 1 basis point to 2.71% in the week. Rates were down from 3.68% from a year ago. The average fee remained steady at 0.7 points.
  • 15-year fixed rates fell by 2 basis points to 2.26% in the week. Rates were down by 88 basis points from a year ago 3.14%. The average fee held steady at 0.6 points.
  • 5-year fixed rates slumped by 30 basis points to 3.86% in the week. Rates were down by 53 points from last year’s 3.39%. The average fee held steady at 0.3 points.

According to Freddie Mac,

  • Despite persistently low mortgage rates, home sales have hit a wall.
  • A scarcity of inventories has put a limit on how much higher sales can increase.
  • The record low supply, combined with strong demand, means that home prices are on a rapid rise, eroding the benefits of the low mortgage rate environment.

Mortgage Bankers’ Association Rates

For the week ending 27th November, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from a survey low 2.99% to 3.00%. Points rose from 0.27 to 0.34 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances remained unchanged at a survey low 2.92%. Points decreased from 0.35 to 0.31 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 3.18% to 3.19%. Points increased from 0.27 to 0.30 (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, slipped by 0.6% in the week ending 27th November. In the week prior, the Index had increased by 3.9%.

The Refinance Index decreased by 5% and was 102% higher than the same week a year ago. In the week prior, the Index had increased by 5%.

The refinance share of mortgage activity fell from 71.1% to 69.5%. The share had risen from 69.8% to 71.1% in the week prior.

According to the MBA,

  • Purchase applications were on the rise, while refinance applications declined.
  • Purchase activity continued to show impressive year-on-year gains.
  • There was also a significant rise in purchase loan amounts, which hit an average $375,000 last week, the highest since the survey began in 1990.
  • Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade.
  • The low mortgage rate environment continues to spark borrower demand, and the mortgage industry is on target for its strongest year of originations since 2003.

For the week ahead

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

Key stats include 3rd quarter nonfarm productivity and unit labor costs and October JOLTs job openings. With the market focus on U.S stimulus talks on Capitol Hill and COVID-19 vaccine news updates, the stats would likely have a muted impact on yields.

The key drivers in the week will likely be COVID-19 vaccine production projections and the FDA’s decision on Pfizer Inc. and Moderna Inc.’s vaccines.

Expect a jump in demand for riskier assets and U.S Treasury yields if lawmakers pass a COVID-19 stimulus package.

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