Mortgage rates dipped last week and could dip again should Russia's invasion of Ukraine continue through the first half of the week.
Mortgage rates held relatively steady after a spike in early February.
In the week ending 24th February, 30-year fixed rates slipped by three basis points to 3.89%. 30-year fixed rates had jumped by 23 basis points in the week prior. 30-year fixed rates held above the 3% mark for a 15th consecutive week.
Compared to this time last year, 30-year fixed rates were up by 92 basis points.
30-year fixed rates were still down by 105 basis points, however, since November 2018’s last peak of 4.94%.
U.S economic data was on the light side in the first half of the week. Private sector PMI and consumer confidence figures for February were in focus. The numbers were positive, with a sharp pickup in service sector activity positive for U.S Treasury yields.
In February, the services PMI jumped from 51.2 to 56.7, driving the composite PMI from 51.1 to 56.0. While private-sector PMIs were positive, consumer confidence weakened. In February, the CB Consumer Confidence Index slipped from 111.1 to 110.5.
While the stats were upbeat, geopolitics weighed on demand for riskier assets in the week.
The weekly average rates for new mortgages as of 24th February were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 18th February, 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, tumbled by 13.1% in the week ending 18th February. The Index had fallen by 5.4% in the previous week.
The Refinance Index slid by 16% and was 56% lower than the same week one year ago. In the week prior, the Index had fallen 9%.
The refinance share of mortgage activity decreased from 52.8 to 50.1%. In the previous week, the share had declined from 56.2% to 52.8%.
According to the MBA,
From the U.S, ISM Manufacturing and ADP nonfarm employment change figures will be key early in the week. While the stats will draw attention, geopolitics will be the key driver. Last Thursday, Russia invaded Ukraine, driving demand for the safe-havens. Progress towards an end to the invasion would support a further pickup in mortgage rates.
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.