30-year mortgage rates were on the rise. Yields could come under pressure in a particularly busy week ahead, however.
Mortgage rates were on the rise in the week ending 24th September. Following a 1 basis point rise in the week prior, the 30-year fixed rose by 3 basis points to 2.90%.
Compared to this time last year, 30-year fixed rates were down by 74 basis points.
30-year fixed rates were down by 204 basis points since November 2018’s most recent peak of 4.94%.
Economic data was on the quieter side in the 1st half of the week.
Key stats included September’s prelim private sector PMI and the weekly jobless claims figures.
It was a mixed set of numbers, with service sector growth slowing, while manufacturing sector activity picked up.
The stalling in the economic recovery was of greater concern in the week, though the PMI decline was marginal.
On Thursday, the weekly jobless claims also disappointed. In the week ending 18th September, initial jobless claims stood at 870K, up from 866k from the week prior.
While the numbers were not horrific, an upward trend in claims was of concern.
Housing sector data in the week also drew attention. In August, existing-home sales rose by 2.4%, with new home sales rising by 4.8%.
On the monetary policy from, FED Chair Powell delivered testimony on Capitol Hill in the week. Powell failed to hit mortgage rates. News of a spike in new COVID-19 cases also failed to pin mortgage rates back.
The weekly average rates for new mortgages as of 24th September were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 18th September, rates were quoted to be:
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 6.8% in the week ending 18th September. In the week prior, the Index had fallen by 2.5%.
The Refinance Index rose by 9% from the previous week and was 25% higher than the same week a year ago. In the week prior, the index had declined by 4%.
The refinance share of mortgage activity increased from 62.8% to 64.3%. In the week prior, the share had slipped from 63.1% to 62.8%.
According to the MBA,
It’s a busy 1st half of the week on the U.S economic calendar.
Key stats include September consumer confidence, ADP nonfarm employment change, and finalized 3rd quarter GDP numbers.
Barring deviation from prelims, expect the consumer confidence and ADP numbers to have the greatest impact.
On the monetary policy front, FOMC members are out in force during the week. Expect the markets to digest and respond to the chatter.
If that’s not enough, there’s the first U.S Presidential Election debate on Wednesday. With Biden holding a solid lead, it remains his to lose…
From elsewhere, stats from the Eurozone and China and COVID-19 updates and Brexit chatter will also influence.
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.