Mortgage rates climbed in the week ending 12th November, according to Freddie Mac. COVID-19 vaccine news delivered the upside for the week.
Mortgage rates rose for the 2nd time in 3-weeks in the week ending 12th November. Reversing a 3 basis point fall to a 12th record low 2.78% in the week prior, the 30-year fixed rate rose by 6 basis points.
Compared to this time last year, 30-year fixed rates were down by 91 basis points.
30-year fixed rates were also down by 210 basis points since November 2018’s most recent peak of 4.94%.
Economic data was on the lighter side in the 1st half of the week.
Key stats included JOLTs job openings for September. A fall in job openings from August’s 6.493m to 6.440m had a muted impact on yields and risk sentiment, however.
Impressive COVID-19 vaccine trial results from Pfizer Inc. and BioNTech SE drove demand for riskier assets early in the week. Pfizer Inc. reported more than a 90% efficacy rate from 3rd phase of vaccine trials on Monday.
The impressive results nullified any concerns over the continued rise in new COVID-19 cases globally.
Biden’s Presidential Election victory announcement from the weekend prior was also considered positive for riskier assets. The markets were also convinced that Trump’s lawsuits and state recounts would fail to overturn the result.
The weekly average rates for new mortgages as of 12th November were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending 6th November, 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, slipped by 0.5% in the week ending 6th November. In the week prior, the index had increased by 3.8%.
The Refinance Index increased by 1% and was 67% higher than the same week a year ago. In the week prior, the index had risen by 6%.
The refinance share of mortgage activity rose from 68.7% to 70.0%. In the week prior, the share had increased from 66.7% to 68.7%.
According to the MBA,
It’s a busier 1st half of the week on the U.S economic calendar.
Key stats include the NY Empire State Manufacturing Index, retail sales, and industrial production figures.
Expect retail sales figures due out on Tuesday to have the greatest impact on yields.
Housing sector figures on Wednesday will also draw attention, with October building permits and housing starts in focus.
Disappointing housing sector figures will likely raise further concerns over inventories and support further increases in house prices near-term.
From elsewhere, industrial production, retail sales, and unemployment numbers from China will also influence market risk sentiment.
Away from the economic calendar, U.S politics, COVID-19 news updates, and Brexit will also provide direction.
On the Brexit front, it’s the final few days of talks ahead of Thursday’s final deadline.
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.