Mortgage rates continued to march towards 7.0%. Core PCE Price Index numbers for August and this week's labor market stats could deliver another rise.
In the week ending September 29, mortgage rates increased for a sixth consecutive week to 6.70%. In the week prior 30-year fixed rates rose by 27 basis points to 6.29%.
Following the 41-basis point jump, rates are up 171 basis points from an August 3 low of 4.99%. Year-over-year, 30-year fixed rates were up by 369 basis points to reach a new 2022 peak.
It was a relatively quiet week on the economic calendar, with durable and core durable goods in focus, with consumer confidence.
The numbers were upbeat. A sharp pickup in consumer confidence gave the Fed another green light to tackle inflation. The CB Consumer Confidence Index jumped from 103.6 to 108.0.
FOMC member chatter also contributed to the upswing in mortgage rates, with members aligned on cranking up interest rates to bring inflation to target.
The weekly average rates for new mortgages, as of September 29, 2022, were quoted by Freddie Mac to be:
According to Freddie Mac,
For the week ending September 23, 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, decreased by 3.7% in the week ending September 23. The Index increased by 3.8% in the week prior.
The Refinance Index slid by 11% and was 84% lower than the same week one year ago. In the previous week, the Index jumped by 10.%. The refinance share of mortgage activity decreased from 32.5% to 30.2%. In the week prior, the refinance share rose from 30.2% to 32.5% of total applications.
According to the MBA,
It is a busy week ahead with manufacturing and non-manufacturing PMI numbers due on Monday and Wednesday. While the ISM Non-Manufacturing PMI will have the most influence, JOLTs job openings and ADP nonfarm employment change numbers on Tuesday and Wednesday will also draw attention.
The Fed has a lot of wriggle room before labor market conditions force the Fed to take its foot off the gas.
Following Friday’s Core PCE Price Index numbers for August, FOMC member 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.