FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
43,346,185Confirmed
1,159,093Deaths
31,904,913Recovered
Fetching Location Data…
Advertisement
Advertisement
Bob Mason
Mortgage application loan agreement and house key

Mortgage rates were relatively flat in the week ending 8th October. Following a 2 basis points fall in the week prior, the 30-year fixed rate fell by 1 basis point to 2.87%.

Compared to this time last year, 30-year fixed rates were down by 70 basis points.

Advertisement

30-year fixed rates were also down by 207 basis points since November 2018’s most recent peak of 4.94%.

Economic Data and Events from the Week

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

Key stats included September’s ISM Non-Manufacturing PMI and August’s JOLTs job openings were in focus.

While service sector activity picked up in September, labor market indicators raised red flags once more.

In the week prior, the weekly jobless claims and nonfarm payroll figures had disappointed. A fall in job openings was also negative ahead of the weekly jobless claims figures for the week ending 2nd October.

Away from the economic calendar, however, U.S politics continued to steal the show.

Trump’s release from the hospital after being diagnosed with COVID-19 was market risk positive. A decision to postpone any further negotiations on the COVID-19 relief bill was market risk negative, however.

On the U.S Presidential Election front, the Vice Presidential debate had limited impact on the markets. Biden’s lead over Trump began to support riskier assets, however. A Democratic clean sweep is expected to deliver further stimulus to support the economy. The markets appear to be willing to accept a repeal of Trump’s tax bills…

Advertisement

Freddie Mac Rates

The weekly average rates for new mortgages as of 8th October were quoted by Freddie Mac to be:

  • 30-year fixed rates decreased by 1 basis point to 2.87% in the week. Rates were down from 3.57% from a year ago. The average fee remained unchanged at 0.8 points.
  • 15-year fixed rates rose by 1 basis point to 2.37% in the week. Rates were down from 3.05% compared with a year ago. The average fee remained unchanged at 0.7 points.
  • 5-year fixed rates slipped by 1 basis point to 2.89% in the week. Rates were down by 46 points from last year’s 3.35%. The average fee also remained unchanged at 0.2 points.

According to Freddie Mac,

  • The year-long slide in mortgage rates seems to be ending as rates have flattened over the last month.
  • As mortgage rates have flattened, the economic rebound has also slowed.
  • But with near record-low rates, buyer demand remains robust, with strong first-time buyers coming into the market.
  • The demand is particularly strong in more affordable regions of the country, such as the Midwest. Here, home prices are accelerating at the highest rate seen over the last two decades.

Mortgage Bankers’ Association Rates

For the week ending 2nd October, rates were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, decreased from 3.15% to 3.12%. Points decreased from 0.43 to 0.32 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances decreased from 3.05% to 3.01%. Points fell from 0.52 to 0.37 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances decreased from 3.33% to 3.31%. Points decreased from 0.39 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, increased by 4.6% in the week ending 2nd October. In the week prior, the Index had declined by 4.8%.

The Refinance Index jumped by 8% from the week prior and was 50% higher than the same week a year ago. In the previous week, the index had fallen by 7%.

The refinance share of mortgage activity increased from 63.3% to 65.4%. In the week prior, the share had fallen from 64.3% to 63.3%.

According to the MBA,

  • Mortgage rates declined across the board last week – with most falling to record lows.
  • Borrowers responded, leading to the increase in the refinance index to its highest level since mid-August.
  • Continuing the trend seen in recent months, the purchase market is growing at a strong clip.
  • Last week, purchase activity was up by 21% from a year ago.

For the week ahead

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

Key stats include September inflation figures due out on Tuesday and Wednesday.

While we can expect the stats to influence yields, the focus will remain on Capitol Hill and the Presidential Election race.

The markets are continuing to hope for further stimulus support from Congress and then there’s the 15th October debate.

Last week, Trump announced that he would not take part in a virtual debate. Breaking the rules once more, the chances of Trump narrowing the gap on Biden are falling…

For the markets, while the repeal of Trump’s tax bill would be market negative, there are some positives to also consider.

From elsewhere, Brexit and economic data from China will also influence market risk sentiment in the week.

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