Mortgage rates slip to a 16th record low. Freddie Mac sees COVID-19 numbers and vaccinations as the key drivers near-term.
Mortgage rates fell to a 16th record low of the year after a 4 basis points fall to a 15th record low in the previous week.
Compared to this time last year, 30-year fixed rates were down by 108 basis points.
30-year fixed rates were also down by 228 basis points since November 2018’s most recent peak of 4.94%.
Economic data was on the busier side in the 1st half of the week.
November personal spending, inflation, and core durable goods orders, together with consumer confidence and jobless claims figures were in focus.
It was a mixed bag on the economic data front. Consumer confidence waned in December, while initial jobless claims fell from 892k to 805k.
The annual rate of core inflation held steady at 1.4%, while personal spending fell by a larger than expected 0.4%.
Durable goods and core durable goods orders continued to rise, however, following October’s jump, supporting riskier assets.
From Capitol Hill, progress towards a COVID-19 stimulus package was risk positive, while continued concerns over COVID-19 and news of new strains tested support in the week.
Later in the week, U.S President Trump refused to sign the COVID-19 stimulus package. Hopes of a better package supported riskier assets mid-week before news of lawmakers refusing Trump’s demands hit the wires.
The weekly average rates for new mortgages as of 24th December were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 18th December, 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, increased by 0.8% in the week ending 18th December. In the week prior, the Index had risen by 1.1%.
The Refinance Index increased by 4% and was 124% higher than the same week a year ago. In the week prior, the index had risen by 1%.
The refinance share of mortgage activity rose from 72.7 to 74.8%. In the previous week, the share had increased from 72.0% to 72.7%.
According to the MBA,
Numbers for the week ending 25th December and 1st January will be available on 6th January 2021.
It’s a relatively quiet 1st half of a shortened week on the U.S economic calendar.
Key stats include November trade data and December Chicago PMI figures. We don’t expect too much influence from the stats, however.
COVID-19 news updates and market sentiment towards the COVID-19 stimulus package will likely remain key drivers.
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.