Mortgage rates fell for the first time in four weeks. Fed Chair Powell's commitment to bring down rates and economic uncertainty weighed on rates.
In the week ending June 30, mortgage rates fall for the first time in four weeks.
30-year fixed rates fell by 11 basis points. Reversing a 3-basis point rise from the previous week, the 30-year fixed ended the week at 5.7%.
Year-on-year, 30-year fixed rates were up by 272 basis points and 76 basis points since November 2018’s previous peak of 4.94%.
It was a relatively busy week on the US economic calendar. Key stats included core durable goods orders, consumer confidence, and finalized first quarter GDP numbers in focus.
The numbers were negative for riskier assets, supporting the pullback in mortgage rates.
In June, the CB Consumer Confidence Index fell from 103.2 to 98.7, which could translate to a fall in spending to add further pressure on the US economy.
On Wednesday, a downward revision to first quarter GDP numbers added to the bearish mood.
With the stats weighing, Fed Chair Powell commentary failed to soothe the markets.
Powell spoke on Wednesday, reinforcing the commitment to bring inflation to target at any costs.
The weekly average rates for new mortgages, as of June 30, 2022, were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending June 24, 2022, the rates were:
Weekly figures released by the Mortgage Bankers Association showed that the Market Composite Index, a measure of mortgage loan application volume, increased by 0.7%. The Index rose by 4.2% in the week prior.
The Refinance Index increased by 2% and was 80% lower than the same week one year ago. In the previous week, the Index fell by 3%.
The refinance share of mortgage activity increased from 29.7% to 30.3%. In the previous week, the share decreased from 31.7% to 29.7%.
According to the MBA,
In a shortened week, factory orders, ISM Non-Manufacturing PMI, and JOLTs job openings are the key stats.
While job openings will draw interest, weakening service sector activity would fuel market fears of a US recession.
On the monetary policy front, the FOMC meeting minutes will also influence US Treasury Yields in the week.
With nonfarm payrolls due out later in the week, we could see risk aversion continue to hit riskier assets, which would support another fall 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.