U.S Mortgages – Rates Avoid a Rise for an 11th Consecutive Week

It’s not just the stats that will influence mortgage rates in the week ahead, with the FED, Brexit, Trade Talks and more in focus…
Bob Mason
mortgage rates

Mortgage rates held steady for a 2nd consecutive week, in the week ending 17th January 2019, with 30-year fixed rates holding at 4.45%, according to figures released by Freddie Mak.

The lack of an upward move marked an 11th consecutive week of flat or weekly declines.

Economic data released through the week was on the lighter side, with key stats including existing home sales, prelim January private sector PMI numbers and the weekly jobless claims figures.

While the private sector PMI numbers came in better than forecasted, service sector activity slowed at the start of the New Year, while the manufacturing sector saw a pickup. For the U.S economy, with service sector growth key, a marginally lower headline number supported those raising red flags over the economic outlook, though the numbers were not bad enough to send the U.S equity markets into a spin.

Outside of the U.S, GDP numbers out of China reflected softer growth, the numbers released ahead of the IMF’s downward revision to economic growth numbers for this year.

Away from the stats and growth forecasts, the ongoing U.S government shutdown was also a factor through the week, as was a particularly downbeat ECB president during the ECB press conference, which weighed on U.S Treasury yields on Thursday.

Freddie Mac weekly average rates for new mortgages as of 24th January were quoted to be:

  • 30-year fixed rate loan remained unchanged at 4.45% in the week, while up from 4.15% a year ago. The average fee remained unchanged at 0.4 points.
  • 15-year fixed rates remained unchanged at 3.88% in the week, while up from 3.62% from a year ago. The average fee remained unchanged at 0.4 points.
  • 5-year fixed rates increased from 3.87% to 3.90% in the week and up 0.38% from last year’s 3.52%. The average fee held steady at 0.3 points.

Mortgage Bankers’ Association Rates for the week ending 18th January were quoted to be:

  • Average interest rates for 30-year fixed, backed by the FHA, increased from 4.76% to 4.82%, with points increasing from 0.52 to 0.62 (incl. origination fee) for 80% LTV loans.
  • Average interest rates for 30-year fixed with conforming loan balances increased from 4.74% to 4.75%, with points decreasing from 0.45 to 0.44 (incl. origination fee) for 80% LTV loans.
  • Average 30-year rates for jumbo loan balances increased from 4.53% to 4.59%, with points decreasing from 0.31 to 0.25 (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, decreased by 2.7% in the week ending 18th January, following the previous week’s 13.5% surge.

The Refinance Index slipped by 5% in the week ending 18th January, partially reversing the previous week’s 19% surge.

The share of refinance mortgages decreased from 46.8% to 44.5%, week-on-week in the week ending 18th January, reversing the previous week’s increase from 45.8% to 46.8%.

According to the MBA, while applications eased back following 2 consecutive weeks of heavy increases, the purchase index remained close to the 9-year high struck in the week ending 11th January, with the refinance index sitting close to levels not seen since last spring.

For the figures released by the MBA, mortgage rates picked up across most loan types, the increases attributed to better than anticipated unemployment claims, easing trade tensions and upward momentum in the equity markets.

For the week ahead

Economic data is particularly heavy in the week ahead, with key stats scheduled for release including consumer confidence, nonfarm ADP employment change, the FED’s preferred Core PCE Price Index figures and, on the real estate front, pending home sales and house price figures.

While we will expect the stats to have an influence on the direction of Treasury yields and influence the FED early on in the week, Wednesday’s policy decision and rate statement, along with updates on trade talks between the U.S and China and sentiment towards Brexit will likely be the key drivers. Any risk aversion and mortgage rates could fall further back in the week ahead, in spite of the U.S President’s white flag moment on Friday, the government shutdown coming to an end.

Friday’s nonfarm payroll and wage growth figures will be released after the MBA’s numbers are released on Wednesday and the Freddie Mac numbers that are released on Thursday.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

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