Mortgage rates rose for a 4th consecutive week ahead of a yield spike on Friday. There could be further increases ahead as the housing sector braces for homebuying season.
Mortgage rates were on the rise for a 4th consecutive week in the week ending 11th March. Following a 5-basis points rise from the week prior; 30-year fixed rates rose by a further 3 basis points to 3.05%.
Compared to this time last year, 30-year fixed rates were down by 31 basis points.
30-year fixed rates were also down by 189 basis points since November 2018’s last peak of 4.94%.
Notably, however, it was just the second plus 3% week since July of last year.
It was a relatively quiet first half of the week on the U.S economic calendar. January inflation figures were in focus early in the week.
The stats were skewed to the negative, with inflationary pressures softening at the start of the year.
The core annual rate of inflation softened from 1.4% to 1.3%, with core consumer prices rising by just 0.1% in the month of January.
From elsewhere, economic data from China impressed going into the week to set the tone.
Exports surged by 60.6%, with imports jumping by 22.2% in February.
The weekly average rates for new mortgages as of 11th March were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 5th March, 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, decreased by 1.3% in the week ending 5th March. In the previous week, the index had risen by 0.5%.
The Refinance Index decreased by 5% and was 43% lower than the same week one year ago. The index had increased by 0.1% in the week prior.
In the week ending 5th March, the refinance share of mortgage activity decreased from 67.5% to 64.5%. In the previous week, the share had fallen from 68.5% to 67.5%.
According to the MBA,
It’s a relatively quiet first half of the week on the U.S economic calendar once more. Key stats include February retail sales and industrial production figures.
Expect retail sales figures to be the key driver.
At the end of last week, a jump in U.S Treasury yields will put further upward pressure on mortgage rates going into the week ahead.
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.